Analysis: The Planned Utility Rate Increases
If one takes out all the campaign rhetoric and promises and focuses strictly on the numbers, the proposed utility rate increases planned for June 1 are so minimal for most residents the issue is hardly worth discussing. And if abated, there will be dire consequences for the city. Yet some city councilmen may go ahead with plans to kill the increase and put the city in real trouble.
--41% of utility users -- those who use under 3,000 gallons of water/sewer a month and 100 mcf of gas-- will see a rate increase on water, sewer and gas of only 30 cents a month.
--Most users --62% who use 5,000 gallons of water/sewer a month--will see a rate increase of only $2.06 cents a month.
--Actual increases run from 1.72% to 4%, for the three utilities.
--Added up for all users, $360,000 will have to be transferred from the City's Capital Budget to make up the shortfall if the rate increase is abated, as Councilman Larry Parham has proposed.
--Many Grove residents will not live to see the day when all of the debt for GMSA is paid off, in 2024-25. A total of four bond issues are currently being paid off at a rate of more than $1.5 million per year and the GMSA cannot borrow another penny. These bonds go back to 1989 with a total of $18.1 million in notes. A 1989 bond expires in 2014-15; a 2005 bond expires in 2020-21; the 2006 bond expires in 2018-19; a wastewater treatment plant bond won't expire until 2024-25 and the four-tenths sales tax won't expire until 2020-21.
--If GMSA were a sick human, it would be a patient in the critical care ward on life support, just a few breaths from death. The only thing holding it together is the movement of money from one account to another.
--Grove's water rates are the lowest of 16 cities surveyed by the Oklahoma Municipal League, since Grove is the only city that gets free water from Grand Lake.
--$700,000 of GMSA's Capital Budget has to be transferred to cover operations and maintenance costs. No spare parts are available. There is no spare generator for the water plant's lake intake. Fifteen years of rate neglect are piling up.
--Two new schools are opening soon; a new hospital is in the works; a huge casino is planned which will drink lots of water and make flushing sounds, and new homes are being built across Grove. All will need water, sewer and gas. New industry which may come to town will also require utilities. Both the water treatment and waste treatment plants are maxed out and estimated costs to expand them approach $4 million, yet there is no money available and no way to borrow it.
Yet Councilman Larry Parham, who made campaign promises to "vote against proposed utility rate increases" persists in his work to abate the increases, which go into effect by Ordinance #526 on June 1, approved by the previous council.
GMSA's trust authority members will consider the issue at a special joint meeting with Council at 4:30 p.m. Wednesday May 23. The sense is that GMSA will turn away the request to abate the rate increases, leaving Council in the embarrassing position of looking into their eyeballs and overriding the very people they appointed to manage GMSA on a sound businesslike basis. GMSA board members realize they have a fiduciary responsibility to keep GMSA in the black.
Citizens who want to keep the infrastructure of Grove from a further free fall would be well advised to attend this meeting and get informed on the facts, rather than run on the emotion of a campaign hangover and coffee shop numbers.
--41% of utility users -- those who use under 3,000 gallons of water/sewer a month and 100 mcf of gas-- will see a rate increase on water, sewer and gas of only 30 cents a month.
--Most users --62% who use 5,000 gallons of water/sewer a month--will see a rate increase of only $2.06 cents a month.
--Actual increases run from 1.72% to 4%, for the three utilities.
--Added up for all users, $360,000 will have to be transferred from the City's Capital Budget to make up the shortfall if the rate increase is abated, as Councilman Larry Parham has proposed.
--Many Grove residents will not live to see the day when all of the debt for GMSA is paid off, in 2024-25. A total of four bond issues are currently being paid off at a rate of more than $1.5 million per year and the GMSA cannot borrow another penny. These bonds go back to 1989 with a total of $18.1 million in notes. A 1989 bond expires in 2014-15; a 2005 bond expires in 2020-21; the 2006 bond expires in 2018-19; a wastewater treatment plant bond won't expire until 2024-25 and the four-tenths sales tax won't expire until 2020-21.
--If GMSA were a sick human, it would be a patient in the critical care ward on life support, just a few breaths from death. The only thing holding it together is the movement of money from one account to another.
--Grove's water rates are the lowest of 16 cities surveyed by the Oklahoma Municipal League, since Grove is the only city that gets free water from Grand Lake.
--$700,000 of GMSA's Capital Budget has to be transferred to cover operations and maintenance costs. No spare parts are available. There is no spare generator for the water plant's lake intake. Fifteen years of rate neglect are piling up.
--Two new schools are opening soon; a new hospital is in the works; a huge casino is planned which will drink lots of water and make flushing sounds, and new homes are being built across Grove. All will need water, sewer and gas. New industry which may come to town will also require utilities. Both the water treatment and waste treatment plants are maxed out and estimated costs to expand them approach $4 million, yet there is no money available and no way to borrow it.
Yet Councilman Larry Parham, who made campaign promises to "vote against proposed utility rate increases" persists in his work to abate the increases, which go into effect by Ordinance #526 on June 1, approved by the previous council.
GMSA's trust authority members will consider the issue at a special joint meeting with Council at 4:30 p.m. Wednesday May 23. The sense is that GMSA will turn away the request to abate the rate increases, leaving Council in the embarrassing position of looking into their eyeballs and overriding the very people they appointed to manage GMSA on a sound businesslike basis. GMSA board members realize they have a fiduciary responsibility to keep GMSA in the black.
Citizens who want to keep the infrastructure of Grove from a further free fall would be well advised to attend this meeting and get informed on the facts, rather than run on the emotion of a campaign hangover and coffee shop numbers.
Labels: GMSA
posted by Editor | 2:00 AM
1 Comments:
Jim, your article certainly explains the situation in terms that maybe our city council will be able to understand. Campaign promises are one thing but when it gets to real world situations common sense had better prevail. To revert to the old method of robbing from Peter to pay Paul will ultimately for the city to go into bancrupcy. When this happens the state will come in and run the city for us. You can bet at that point rate increases will amount to a major blow to make up for our previous fiscal irresponsibility.
Citizens had better attend the budget meetings to voice concern now, for it may be to late after the damage is done.
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