STARKVILLE — Starkville Utilities has its rate increase, though the new rates are less than what was requested.
General Manager Edward Kemp approached the board of aldermen in August, requesting it approve increasing the base monthly rate for water and sewer, plus increases in the variable rate for both, to generate extra funding for capital improvement projects.
The board on Tuesday approved smaller increases in a 4-3 vote, adding $3 to both the water and sewer base monthly rates for users inside city limits with no change in the current variable rate of $4.50 for both sewer and water.
Ward 2 Alderwoman Sandra Sistrunk, who voted against the approved increase, said the $6 hike falls short of addressing the long-term issues that the capital improvement projects are meant to resolve.
“I don’t think it provides enough support for the projects that need to be done,” she said. “While I understand the idea of trying to minimize the burdens to the citizens, at some point we have to pay for these things. … The rate increases proposed have us back here in nine to 12 months talking about another large rate increase.”
Kemp’s long-range capital improvement plan originally estimated the projects need at least $2 million in additional sewer revenue and $1 million in additional water revenue each year to fund. To achieve that, he originally proposed a new base water rate of $8.50 for the first 1,000 gallons and $5 for each additional $1,000 gallons. For sewer, he proposed the base rate $10.75 with a variable rate of $6.50.
Capital improvements under the plan include replacing six aerators in Starkville Utilities’ wastewater treatment plant that failed in 2019.
Revenue from increased rates would also help fund a new production well.
Sistrunk proposed a different plan at the start of Tuesday’s discussion that would increase the base water rate from $6 to $9 and the sewer base rate from $6 to $13 and leave variable rates the same. That plan would generate about $600,000 in additional water revenue and about $1 million in additional sewer revenue annually, she said.
Her proposal would buy the city at least two years before having to worry about another rate increase, she said.
Ward 5 Alderman Hamp Beatty acknowledged the need for additional revenue but said he was still concerned about the impact of the increase on customers. He raised the same point at the Sept. 3 meeting during which the board voted to table the proposed increases.
Ward 3 Alderman Jeffrey Rupp agreed with Beatty. He said the increase combined with an impending 5.25% base rate increase from the Tennessee Valley Authority for power in October will both be hard on citizens.
“Whether we like it or not, TVA is coming with a rate hike, and there’s nothing we can do about it,” he said. “The money goes to TVA, but at the end of the day, you’re going to pull out your purse or your wallet, you’re going to pay a certain amount of money. You don’t care if it goes to the TVA or the city, they’re still spending that money.”
Sistrunk’s proposal failed in a 5-2 vote, with Rupp, Beatty, Ward 7 Alderman Henry Vaughn, Ward 4 Alderman Mike Brooks and Vice Mayor Roy A. Perkins voting no.
As an alternative, Beatty proposed increasing both the sewer and water base rates by $3 each for users in the city, with no change in the variable rates. The plan increases both the current water and sewer base rates from $6 to $9, generating a little more than $1 million in additional revenue annually.
Beatty’s proposal passed 4-3, with Sistrunk, Perkins and Ward 1 Alderwoman Kim Moreland voting against it.
As for whether the new increase will adequately fund the capital improvement plan, Kemp said some projects will need to be prioritized over others.
“We’ll have to go back and look at the capital improvement plan based on the funding that was recommended by the board tonight,” he told The Dispatch after the meeting. “So we’ll be doing it over the next week or so to prioritize the projects that we can do within this current budget, plus the additional revenue provided from the rate increase.”
The increases to water and sewer base rates will go into effect Nov. 1.
McRae is a general assignment and education reporter for The Dispatch.
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