Starkville Utilities Department water customers could soon see a rise in their water rates.
Nelson McGough with the Mississippi State University Extension Water Research Institute gave a presentation in conjunction with Edward Kemp, general manager of SUD at the Starkville board of aldermen work session on Friday.
McGough and the WRI have worked with SUD for the last five to six years on water rate evaluations, and he built a model for water rate based on the customers’ usage.
In his presentation, he suggested a base rate change from $9 to $12 for water and sewer customers and a base rate change from $4.50 to $6 for water only customers. The base rate is the amount someone pays for using a thousand gallons of water or less, anything after is based on the variable rate.
Mayor Lynn Spruill said base rate helps pay for capital improvement projects and the infrastructure operations and maintenance, and it is the constant that can be relied on for those expenses.
“Remember base rate is basically your infrastructure, your capital projects, the things we are trying to do more of,” Spruill said. “… Everyone is using that piece of it, which is why it makes sense for that to go up a certain amount.”
McGough also proposed increasing the variable rate, the amount per thousand gallons used after the first thousand covered by the base rate. Currently the variable rate is $8.30 per thousand gallons of water used, and the proposed variable rate is $9.
With the proposed water rates, the most common type of water and sewer customer, who uses 2,000 to 5,000 gallons of water per month, would see their bills go up roughly $4.63 based on McGough’s research. The most common type of water only customer, those using less 1,000, would see their bill increase just $1.50.
McGough said even with the new rate change, SUD customers would still be below the state average. At 5,000 gallons of water, a SUD water and sewer customer would pay $48, and the state average is $52.43.
With an increase in both base and variable rates, SUD would have an additional annual revenue of $1,075,113 to help with operations and maintenance as well as capital improvement projects.
Kemp said an increase in cost for operations and maintenance because of rising supply costs has impacted capital improvements. In fiscal year 2020, SUD had nearly $2 million for capital improvements, but that has declined since to less than $1 million.
“Over the last two years what we’ve seen is an increase in our operations and maintenance and our personnel cost,” Kemp said. “What that has done, ultimately, is cut into that capital number which has gone down to about $750,000 a year is what we’re currently at. … This does not include any grants that we’ve had. Grants are obviously not something we pursue a lot, but we can. We have invested more than that in capital projects.”
Moving forward in regards to capital improvements and what the increase in rates would help fund, Kemp said among projects currently in the works, he would like to have an engineer come in to take a comprehensive look at the water and sewer treatment facilities and processes.
Kemp said while things right now are good, it is important to consider more long term priorities like sustaining Starkville’s population 10 to 20 years from now.
Kemp said if the aldermen considered and approved the water rate change at their next meeting, the new rates could go into effect in January.
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