Meeting Summary
The city council held a study session to receive an update from RAF Telus on the cost of services study for utility connection fees and rates. The presentation highlighted significant underfunding in both wastewater and water utilities, necessitating potential rate increases and bond financing for critical capital projects, including a chromium treatment facility. Discussions focused on various financial scenarios, the impact of growth, and the balance between user rates and connection fees.
Financial Matters
Wastewater Utility Financial Plan
Annual revenues are slightly lower than operational, maintenance, capital, and debt expenses. A 10% rate increase (approximately $1.50 on the base charge and $0.30 per thousand gallons) combined with bond financing for near-term capital is proposed to maintain financial health and reserves. Without bond financing, a 33% rate increase would be required.
Water Utility Financial Plan
The water utility is deficient in meeting revenue targets, expenditure targets, and reserve levels. Scenarios indicate the need for significant rate increases in fiscal years 2024 and 2027. The 10-year Capital Improvement Program includes a $395 million expenditure, with a large portion in fiscal year 2028 for a chromium treatment facility. Connection fees ($1500 for a 3/4 inch meter) are a small part of the overall revenue picture. Full connection fees for augmentation would be $3100, but are not currently pursued due to lack of regional buy-in.
Coming Up
Deadlines
- EPA is expected to release a new MCL for chromium, requiring implementation within approximately five years.
- Oklahoma City's next phase of pipeline construction to the Kiamichi River is due by 2035.
Watch For
- Finalizing financial plans in January and February.
- Evaluating rate design alternatives in February.
- A final meeting with Council in late February to present all findings.
- Presentations to Midwest City and Del City councils regarding the water augmentation plan.
- A Council meeting on January 10th to discuss a model for putting water back into the lake.
Announcements
- Norman received an award at the Governor's Water conference for its water reuse research and wetlands work, recognized as a leader in water recycling for inland states.
Agenda Summary
Update from RAF Telus regarding the cost of services study for utility connection fees and rates
A detailed presentation on the financial plan, cost of service, and rate design study for water and wastewater utilities. This included an overview of current financial health, projected capital improvement programs, and various scenarios for funding, including rate adjustments and bond financing.