Denison residents could soon be seeing an increase in utility rates going into the next fiscal year.
The city council discussed the utility rates at its budget workshop last month ahead of the regular meeting. The city is contemplating ways to address the added usage from it’s growing commercial sector while supporting the capital improvement projects the city is facing. The council was presented with a 2.5 percent to 3.5 percent annual rate increase in water and sewer for on the base rate and variable rate increases. The lower rate was for residential and commercial customers with the larger rate for industrial customers.
Denison Mayor Janet Gott said the rate increases as proposed were reasonable considering the projects while taking into consideration the city’s demographics.
“I think we need to consider our demographics as we are raising these rates,” Gott said. “We have a lot of people who are on fixed income. One of the things I asked last year was that we look at those households that were over 65 in particular. I think this is a compromise. I don’t think we went as far as freezing it at 65 like we talked about. This gets us to where we can do those CIP projects that are necessary for the city’s growth. I feel like these numbers are a good compromise.”
Denison City Manager Jud Rex said the city was working on finding a rate that would support the bonds the city needed to support its capital improvements while not stunting economic growth.
“The rates we have here are going to continue to put money towards our infrastructure,” Rex said. “We feel like this is a good compromise rate position for us. We’re not going to be the most expensive, we’re not going to be the least expensive. This is somewhere in the middle it will allow us to fund a lot of the water and sewer projects we are talking about.”
Director of Financial and Administrative Services Renee Waggoner said there are two components that affect the city’s water and sewer rates. She said the first component is the fixed rate, or base rate that the customers pat to support the maintenance and capital needs of the system. She said the other factor is known as the variable rate which is the consumption rate which accounts for the operating cost of providing the service.
The current base rate for customers in Denison is $48 for residential, $ 64 for commercial and $118 for industrial. The proposed rate for 2020, which would go into effect in December if approved, is $51 for residential, $72 for commercial and $126 for industrial.
The variable rate, which goes into effect once the first 1,000 gallons have been used, is currently $5.5489 for residential, $7.3922 for commercial and a tiered rate for industrial. The proposed rate for the variable rate for next year was set at $5.687 for residential, for commercial it was to be $7.6509 while maintaining the tiered rate for industrial. She said industrial customers have a tiered rate where the more the firm uses the lower their base rate will be. She said it is because those customers use very large quantities of water. Waggoner said the rates would likely change once the council has had a chance to look everything over. She also said the rates as discussed were combined water and sewer rates and that there are actually separate rates for each on a customer’s utility bill.
Waggoner said there would be more meetings between now and September before the numbers are finalized. She said there is some concern about shifting some costs from residential customers to commercial customers.
Waggoner said it’s too early to tell what the approved rate will be. She did say it will be going up, she wasn’t sure by how much but knew it would due to the rising cost of providing the service. She said government is not in operation to make a profit, the goal is to cover costs. She said when costs go up, rates inevitably follow.
What do you think of the water rates increasing? Let Herald Democrat Denison Area Reporter Richard A. Todd know via email at email@example.com