Mississippi State University Assistant Extension Professor Jason Barret, left, speaks on data he compiled for Starkville Utilities Department that shows the usage trends among customers and compares the city's rates to other Mississippi cities of similar size. Starkville Utilities Director Terry Kemp listens during the discussion. Photo by: Alex Holloway/Dispatch Staff
July 5, 2018 10:27:41 AM
Starkville is raising water and sewer rates and adjusting its rate structure to help fund planned infrastructure upgrades.
Aldermen voted 6-1, with Ward 6's Roy A. Perkins opposed, to raise rates at Tuesday's meeting. The board also restructured how Starkville Utilities charges its base rate and for additional use to shelter low-use customers from increased water and sewages costs.
The new structure, proposed by Ward 2 Alderman Sandra Sistrunk, keeps the monthly base rate for water service at $4 and raises the base sewage service rate from $3.50 to $4. It also raises the variable rate -- or the amount charged for every 1,000 gallons of both water and sewage use -- from $2.26 to $3.25.
With the increase, the board also adjusted the base rate to include the first 1,000 gallons of water and sewer. Currently, Starkville Utilities charges the base rate for service and the variable rate for every 1,000 gallons. With the change, the variable rate won't kick in until after the first 1,000 gallons have been used.
The new rates take effect Sept. 1 and are expected to generate an additional $1.7 million annually.
The city is looking to take on several big infrastructure improvement projects. Officials are looking to replace aging water and sewage infrastructure beginning in three neighborhoods -- Pleasant Acres, Green Oaks and Rolling Hills. That work will likely continue in other areas once those, which Starkville Utilities Director Terry Kemp said are the three neighborhoods that see the highest volume of calls for repair work, are complete.
City officials hope to begin work in Pleasant Acres, which is estimated to cost $600,000, later this year. Green Oaks, which will likely be divided into phases, is estimated to cost $2.4 million and Rolling Hills work is estimated at $900,000.
The changes will also help fund needed work at the city's lagoon, which Kemp said is near capacity. Kemp said that will likely take a $7.5 million bond issue, with an estimated $800,000 annual debt service.
In all, Sistrunk said, the new rates should generate the needed $800,000 per year for the lagoon and about $900,000 for water and sewer improvements.
"It is something that needed to happen," Mayor Lynn Spruill said. "It's very forward thinking and, I think, one of the most important things we will have done in this term. I'm very excited about it."
Spruill also lauded aldermen for taking proactive measures to improve the city's water infrastructure. She said she isn't aware of any other cities taking action such as Starkville is to fix infrastructure before it begins to fail.
"Most of them wait until they don't have an alternative," she said. "That's why I'm so proud of this board -- they recognize that we need to be a step ahead."
Bill change examples
According to data Mississippi State University Assistant Extension Professor Jason Barrett presented to aldermen, about 43 percent of Starkville Utilities' customers use less than 2,000 gallons of water per month. While those customers make up the largest chunk of users, they only represent about 4 percent of the system's use and 16.5 percent in terms of dollars generated.
Customers who use more than 5,000 gallons, on the other hand, make up about 26 percent of the customer base. However, they represent 81 percent of usage and about 63 percent of the dollars generated.
"It will impact about 50 percent of our customer in terms of increasing our rates," Sistrunk said. "Most people will see the same or less in terms of our water or sewer bill. But it positions us to take care of the things we need to take care of."
Sistrunk, presenting water usage numbers from actual bills, said a single-person household that uses about 900 gallons of water per month could actually see their bill decrease. For example, a household that used 900 gallons of water and sewer service in a month could see their bill fall from $11.56 to $8 -- a decrease of $3.56.
Homes or businesses that use more will see larger increases. Using her own home as an example of a two-person household that uses about 3,980 gallons of water, Sistrunk said the bill would go up about $1.89. A five-person household that used about 5,480 gallons would see an increase of $4.85, and a medical office that used 5,110 gallons would see a raise of $4.12.
Sistrunk also used OCH Regional Medical Center's water and sewage usage to show an example of a major water consumer. The hospital, using more than 1.4 million gallons in a month, would see an increase of $2,785 under the new structure.
'I'm not aware of any crisis'
Perkins, speaking to The Dispatch after Tuesday's meeting, said he feels the board should have taken more time to study the issue before deciding on the rate increase. He said he doesn't see a need to rush and, during the meeting, noted there will always be a need for water infrastructure work.
He said he didn't see anything during the meeting to support an increase in water and sewer rates.
"Rolling Hills, being the area that I represent, is in very fair to good shape," Perkins said. "I'm not aware of any crisis in Rolling Hills. I think the board saw this as an opportunity perhaps that they may have the votes to get this passed tonight. Even though Green Oaks and Rolling Hills are older neighborhoods, that does not necessarily mean that we had to expend the money for this project."
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