Water and electric rates are going up for customers of Trenton Municipal Utilities.
The city council last night approved recommended increases with the largest percentage taking effect this year and smaller increases in subsequent years.
Increases in water rates are based on the assumption ConAgra closes its Trenton plant next year; and no one comparable moves into the facility. However, the city council – as part of the motion to adopt the new rates – said it plans to evaluate rates each year.
Burns and McDonnell engineers did a five-year financial plan to determine water department capital improvement projects at Trenton and the funding to meet those needs as well as debt projected over the next 20 years. It was noted with the anticipated loss of ConAgra, water department revenues for Trenton would have dropped by about 34 percent if existing rates were maintained.
A 12 percent increase in water rates takes effect April 1. That figures to an increase of around four dollars a month for the average residential water bill of approximately 33 dollars per month. The new average bill will be $36.55 monthly which is described by city officials as the third lowest upon 13 other area communities. Water rate increases of eight and a half percent are projected in each of the next three years.
An 8 percent increase in electric rates effective in May figures to an extra 12 dollars per month. Officials noted the average residential electric bill at Trenton-based on one thousand kilowatts used monthly is approximately 120 dollars. An increase of three percent is planned for May of 2018 for Trenton customers.
Additional three percent hikes in electric rates are anticipated annually in the future.
In looking at the needs of the water department, major forthcoming expenses include paint and repairs of two water towers; ($450,000) repair and seal primary basin walls ($100,000); and annual water main replacement projects ($400,000) And there are other projects to be done.
It was noted the various water production and distribution projects through the year 2021 have an estimated total cost of five point three million. This includes $3.1 million for water production and 2.2 million for water distribution.
Certificates of participation bonds were issued in 2013 amounting to more than three and a half million dollars. ($3,565,000) That year also was the last water rate increase.
As of this May, three point one million in debt is still outstanding. The existing payment schedule runs through the year 2038. It was noted funding the capital projects will require the issuance of debt to mitigate the impact on customer rates. Two debt issues are anticipated: one in the fiscal year 2018 and another two years late in the fiscal year 2020.
Together, it’s three point two million dollars in debt issuance.
TMU officials assume these will be 20-year terms with a four percent interest rate. Two point one million dollars is to be generated in cash to complete funding the capital improvement work.
A guiding principle for financial planning also is to maintain enough operating reserves for 60 to 90 days at any one time.
Turning to the electric rate increase averaging eight percent this year, with future increases of three percent; capital improvement projects planned by TMU include north sub-station fuel tanks and replacement of a 12-year-old 60-foot bucket truck.
A historical reference provided by TMU on electric rates shows a nine percent increase was done in 2014; one percent hike in 2015; and no rate increase last year – 2016.
Utility rates have been discussed in recent meetings involving the city councils’ finance and utility committees.
Aside from city employees, no one from the public was present at city hall when the city council discussed the new rates and heard a presentation from Trenton Municipal Comptroller Rosetta Marsh.
The new rates were unanimously adopted by the seven members of the city council present last night: Mark Moore, Larry Porter, Brad Chumbley, Travis Elbert, David Mlika, Jen Hottes, and Allan Quilty. Councilman Scott Blair was absent.
Quilty presided at the meeting in the absence of Mayor Nick McHargue.
