Western Nebraska Observer - Observations all along the line - Kimball & the Southern Panhandle First

Citizens will soon see increased utility rates

 


Residents in both the city and county of Kimball will soon face higher utility costs and may soon see increased utility deposits as well following votes at the May 31 Board of Public Works meeting.

Kimball’s utility deposit amount has remained steady at $100 for residential utilities and $250 for commercial since 1999.

The board took time to compare the current deposits with that of other communities and discussed the average utility bills for both residential consumers and businesses. They further considered the next agenda item, increased utility rates.

Following the discussion, board member Greg Robinson suggested increasing residential deposits to $150 with an additional $50 deposit for a second meter, if it is neighboring and used by the same consumer. For instance, if a garage on the property has its own meter, the deposit for that second meter would be an additional $50.

With the hike in residential deposits, board member Sonny Porter suggested raising the commercial deposits as well, also by $50, making the proposed deposit $300.

City Administrator Daniel Ortiz indicated the City is starting the budget process and commented on allocating the deposits as a separate line item.

A resolution to put the increase into effect will be presented at a future meeting.

In a memo to members of the board, Ortiz explained that in recent years the City of Kimball has faced circumstances effecting each utilities ability to cover its own expenses.

Such circumstances stem from regulatory requirements, additional expenses for capping and expanding landfill cells, repair and replacement costs and issues faced by the City’s electricity supplier.

“The board sought to have an analysis conducted,” Ortiz added. “The City wanted to be thorough in reviewing the recommendations and implementation of the new rates.”

Two companies, Baker and Associates and JEO Engineering, reviewed and assessed the utility departments and found that current revenue does not cover current expenses for the water, sewer and landfill departments.

The memo states, “Most of the utilities had positive net positions at the end of September 2012 with the exception of the landfill. The water and sewer utilities had a slight positive net position which began to decline the following years. In subsequent fiscal years the water water and sewer utilities saw decreases in revenues.”

“For at least the past two year our auditors have pointed out the need to review our current rate structures for our utilities and the golf course,” Ortiz said.

Ortiz added that utility savings account money has been used to pay expenses while waiting for bonds, refinancing and other revenues to come in, essentially making up for the shortfall in certain utilities.

The increased rates will ensure that each utility maintains a positive fund balance, according to Ortiz.

“Only then will the City be able to begin to address aging infrastructure and capital needs such as needed upgrades at the waste water treatment plant, a new transformer for the south substation in the future, a digger derrick to replace the existing one in the future, expansion of the solid waste cell that was built at only 1/3 the original size due to budgeting and financing constraints and the replacement of sewer and water infrastructure.”

The proposed rates, to be implemented in phases, are intended to stabilize the water, sewer, and landfill and garbage collection utilities and to ensure adequate stable revenues can continue to support those services.

Landfill rates will increase automatically instead of in a two-phase process due to an agreement the City has with the County. Landfill rates increased in 2010, again in 2014 and will be increased in 2017, with plans to consider rate increases annually.

Additionally, gate fees, as well as charges for scrap tires will increase and a new charge for construction machinery tires was added.

Large tree stumps, logs and branches will be charged at the Construction and Demolition rate in the future and a private commercial hauler fee has been added.

According to documentation provided by the City, “The City of Kimball has one of the lowest volume of tons processed for a landfill. Part of the reason why Kimball’s landfill rates are higher than others is that Kimball doesn’t have the economies of scale.”

“Ortiz indicated that the electric rates will have to be done sometime in the winter or spring to allow time to implement the changes into the Power Manager utility system and recommended waiting until January to revisit the electric rates. Ortiz said that changes still need to be made to differentiate between the single phase and the three phase meters. He is still waiting for the outcome from the other rate increases to see how it will alleviate the burden on the Electric Department,” the document read.

Ortiz added that plans need to be implemented to begin replacing the south substation transformer, at an estimated cost of $1 million.

“Next month will begin the budget process and the needs can be assessed at that time. Ortiz commented on bonding the project and said that the bond counsel would look at whether or not the City has shown a past history of diligently increasing rates,” read the City documentation.

 

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