The Altus Municipal Authority (AMA) and the City Council met Thursday, July 12 for a Special Meeting beginning at 6:30 p.m. This meeting completed some items that were not covered on the July 3 meeting with different utility increases. These new increases were approved as suggested by City Financial Director James Wilson, except the price per kWh for electricity for Bar-S and the Cotton Growers Co-op Gin.
All members but Rick Steen were present. The City Council meeting was held first because an AMA item depended on knowing the outcome of council meeting items. City Financial Director James Wilson gave the City Council and audience members reasons for how Altus has arrived at the place it is needing to enact across the board utility increases.
Wilson said the City used the departmental budgets and removed all discriminatory (non-priority) items. They reduced travel by 50 percent. They then looked at the budgeted items and determined the funding necessary to provide these services and items. The City was $2.6 million short so they enacted a hiring freeze. They determined a ten percent cut in personnel services was necessary, reducing the 260 City employee positions by 30. The state does not allow cities to have unfunded budgets, so funding had to come from somewhere. The utilities charges had not been keeping up with inflation rates, and some rates hadn’t been increased for years. Some rates, like the sewer rates and flat bed service are so low, compared to similar cities, that reasonable increases may appear to be very high. The actual increases for City residents may be only eight to 10 percent increases. The flat bed service is increased from $1.00 to $2.50, a 150 percent increase, but still reasonable. There will be flat bed service, but this will only be for those already on the current list. Chief of Operations Bob Stephenson said they will inform the public of flat bed service when contractors have been obtained for that service.
The council voted seven to zero to approve Ordinance No. 2012-16, making minimum increases for garbage and trash pickup rates for all classifications; increasing residential from $10.60 to $15.00, business establishments, schools and churches, from $20.00 to $22.20, and increasing the flatbed service for all classifications from $1 to $2.50 per month. For the Emergency section making the change effective upon approval, July 12, 2012, six approved the emergency clause and Chad Osborne voted “No”.
The council voted seven to zero to approve Ordinance No. 2012-17, increasing the landfill rates for Resident Contractors and Businesses rate from $26.50 per ton to $30.00 per ton and changing Non Resident Contractors and Businesses from $45.00 per ton to $46.00 per ton. The Emergency section making the change effective upon approval, July 12, 2012 was approved six to one, with Osborne dissenting on the emergency clause.
Wilson said that the residential water customer charge in 1964 was like now, $6, and a lot of inflation has taken place since then. So the same charge was increased to 13.22. With the $.28 charge for zero to 3,000 gallons, that makes the minimum water rate in the City $17.50, up from $10. The council voted seven to zero to approve: 1) Ordinance No. 2012-18, to increase water rates for customers inside the City limits, the minimum monthly bill from $10.00 to $17.50 and the over 3,000 gallons, per thousand gallons from $3.00 to $3.21; and to increase for customers outside the City limits, the minimum monthly bill from $16.00 to $23.92 and the over 3,000 gallons, per thousand gallons from $5.25 to $5.62. The Emergency section making the change effective upon approval, July 12, 2012 with the July, 2012 billing cycle, was approved by six to one, with Osborne dissenting.
Wilson said that out of all the utilities, the sewer fees were the farthest behind. Council member Scot Simco asked if this increase would bring the sewer charges to a “break even” point. Wilson explained a break even includes investment in future infrastructure. This new charge wouldn’t cover that, but next year they’ll look at an increase that would. The council voted again, seven to zero to approve Ordinance No. 2012-19, making minimum increases for sewer fees for residents ($4.50 to $10.00 minimum) and non residents ($8.00 to $13.50 minimum) and increasing the additional charge from $1.125 to $1.243 per 1,000 gallons of water. The Emergency section making the change effective upon approval, July 12, 2012 was approved by a vote of six to one, with Osborne being the “No” vote.
Wilson said that the package of electrical increases is the most complex and “in line with our costs”. He said if the study done by the Prime Group comes back with different recommendations, the council can reconsider the electrical rates. The kWh cost will be up for residential customers by seven percent, with varying charges in winter and summer. Industrial customers’ kWh rates will be up 4.9 to 6.1 percent, Wilson said.
At at that point, Rick Henry proposed that the Bar-S and Cotton Growers Co-op Gin new kWh rate of $0.002 be cut in half. He reasoned that Bar-S’s rates have gone up for two consecutive years and that they might not “swallow this”. This puts a burden on them at a time when Altus has come up on their corporate radar due to increases. Henry said he’d hate to lose either of these two businesses. He wants Altus “to have a shot at the Bar-S expansion”. Henry also suggested putting both of these businesses on contract so they could plan ahead.
In response, Wilson said that contracts with employers are standard and best practices. He asked where the money would come from to be able to shave off the $0.001 off the kWh rate for the two companies. The funds will be offset by water revenues.
Tom Buchanan, from the Cotton Growers Co-op, spoke on the 70 percent increase they received on their electrical in the 2010 to 2011 year. Cost for electrical service went from $1.93 per bale in 2009 to $3.31 in 2010, to $3.43 in 2011. Buchanan explained when they were on S. Main, they were a PSO customer. They were asked to come back to the City power to help offset lower energy consumption. They are outgrowing their current facility and want to stay in the community, Buchanan said. Scot Simco asked Buchanan if the Co0-op passes that price increase on to its customers. Buchanan said, “Yes”.
The council voted seven to zero to approve Ordinance No. 2012-20, increasing electrical service customer charges per month depending on the customer classification, (adding the exception suggested by Henry regarding the kWh rate for Bar-S and the Cotton Growers Co-op Gin):
Residential Customer charge, Per Customer monthly from $10.50 to $14.08
Small Commercial…………………………………………….. from $15.00 to $19.33
Large Commercial……………………………………………… from $40.00 to $48.45
Industrial Level 1……………………………………………….. from $50.00 to $58.25
Industrial Level 2……………………………………………….. from $200.00 to $233.00
making adjustments in charges to all electrical classification customers, residential, small commercial, level 1 industrial, level 2 industrial, and special commercial, of the Altus Code. The Emergency Section with an effective date of July 12, 2012, was approved six to one with Osborne voting “No”.
In executive session, the council received a negotiation update between the City of Altus and the IAFF. Later in open session, council voted to authorize the signing of the collective bargaining agreement for 2012 through 2013 with the IAFF.
Also in executive session, council received a negotiation update between the City of Altus and the FOP. No action was taken.
The council considered a request from Parks and Recreation Director, Randy Marple, to take both the Limited Time Severance Incentive program, ($9,000.00) and the OMRF Open Window Retirement Program. In open session council voted six to one to deny Marple the severance pay. B.F. “Jr.” Rowland was the dissenting vote.
Mayor Webb made no appointments.
City Administrator Elizabeth Gray was attending the OMPA Board meeting, so she made no comments or reports.
The council had to begin the AMA meeting at this point, with all but Steen present.
In the AMA, the trustees approved the utilities increases approved by council by a seven to zero vote.
Stephenson gave an update on the water plant. He requested an emergency repair last week and this was accomplished by Shoestring Enterprises of Olustee. Both Stephenson and Osborne complimented the work done by the Hanson group. This repair was key to the whole plant, which was built in 1974, Stephenson said.
Also reporting on water from Tom Steed Reservoir, Stephenson said it is 53 percent full, which would last Altus another two to two and one-half years at current allocation. He said contrary to some talk in town, the City of Altus does not sell water to Hackberry Flats. They have their own contract with the Mountain Park Water Conservancy District. Stephenson added that if it was between the ducks and the people, the people would get the water.
The AMA adjourned.
Back in the City Council meeting, council members’ comments and reports included:
Perry Shelton said he had the opportunity to attend a DEQ meeting with Elizabeth Gray. They were briefed on the water problems in Altus. DEQ is pleased with the Altus plan and minutes of the meeting will be available soon.
Jack Smiley said he was glad they’d gotten through the budget process and the increases. He said he’s still positive about the future of the City.
Scot Simco asked Stephenson about the stairs at the west water treatment plant. Stephenson said comparisons of various types of stairs are being made.
Rick Henry said the Lawton Constitution featured an article about Ft. Sill rationing. Frederick is rationing now too. Henry asked Stephenson after two years of severe drought if it’s not time to institute at least “odd and even water days”.
Stephenson replied that some rationing is due to broken lines and others because it’s the prudent thing to do. He would like to see voluntary conservation practiced here.
Perry Shelton added this is the lowest Tom Steed has been since its construction and filling.
Smiley asked our water allocation from Steed.
Stephenson said it’s 11,200 acre feet, of which we used 7,000 last year. He encouraged council to start thinking about a two to three year plan. The City Reservoir is going down about one-half an inch per day.
Smiley said he spoke with Tom Buchanan and Lake Altus Lugert’s water allocation for Altus is 4,800 acre feet. By the time we’d have to use that water it would be strictly rationed because of its poor water quality.
Stephenson said Tom Steed was 83 to 84 percent two years ago. He’ll be giving council monthly updates on water. He’s contacted Prime Group for a water study and he will get more information on that for council.
Mayor Webb said he appreciated the dedication of council, James and Elizabeth for the budget and funding. They will try to be ahead of the curve for next year.
The meeting adjourned 9 a.m.