Niles council votes in rate increases for electric, water and sewer

Published 9:21 am Wednesday, July 29, 2015

Despite vocal opposition by two Niles residents, the Niles City Council voted unanimously Monday to increase rates for the city’s electric, water and wastewater utilities in order to keep up with rising maintenance and operation costs.

Beginning Oct. 1, electric rates will increase by 3.2 percent, water rates by 10 percent and wastewater rates by 10 percent.

The average utility customer can expect to see their monthly electric bill increase by $2.55, water bill by $2.59 and wastewater bill by $2.25, according to estimates provided by the utilities division.

During the public comment portion of Monday’s meeting, Niles resident David Lutin complained that the cost of living in Niles continues to rise even though he hasn’t received a pay raise in years.

“It is getting to the point where we’ve got to move out of Niles because we can’t afford live in Niles,” he said.

Niles resident Scott Zeider had similar concerns and urged the council to reconsider raising utility rates.

“I don’t want to live in a ghost town. I’ve lived here all my life,” he said.

Mayor Mike McCauslin proposed that the council eliminate the electric rate increase, while keeping increases to water and sewer rates — the two utilities in most need of additional revenue.

“They (water and sewer) just aren’t being funded well enough to provide for the long-term viability of those systems,” he said, adding that expert studies have determined the rate adjustments are necessary.

To make up for revenue lost by not raising the electric rates, Utilities Manager Jeff Dunlap said the city would need to tap into the electric division’s reserve fund, which sits at approximately $3 million.

“We would be pulling operating expenses out of cash reserves, which is obviously not a good thing,” he said.

Councilman Daniel VandenHeede said studies show that if rates are not raised, the electric utility would have a deficit of $267,000 next year, a $625,000 deficit a year later and a $1 million deficit the following year.

“At some point I don’t see where we can absorb this,” he said. “It’s an unfortunate position we are in, but it is the position we are in.”

A motion to approve increases to water and sewer rates, but not to electric rates, failed by a unanimous “no” vote.

Scott Clark was the first councilman to voice his opposition to foregoing an increase in electric rates, saying if they don’t raise rates now, they would have to raise them even more in the future.

“You have to admit we have pretty darn good electric and water and sewer. We have to pay to keep it solvent and in good working order,” he said. “It is not like we want to pay more… that’s the way I look at it. It is a have-to deal. We have to do it.”

After the first motion failed (the one without the electric rate increase), the council voted unanimously to raise rates for all three utilities divisions.

Dunlap said there is some relief on the way for electric customers. A surcharge placed on electric sales would be cut in half at the end of the year, resulting in a savings of about $3.50 a month for the average customer. The surcharge is helping fund the removal of the Pucker Street Dam.

Also Monday, the council:

• Approved a request from the Four Flags Area Chamber of Commerce to hold an additional craft brew and wine festival during Niles Trails & Ales Festivus from noon to 4 p.m. Sunday, Aug. 2. The council already approved the same request for Saturday, Aug. 1.

• Approved a request from Mount Calvary Baptist to hold a community block party from 10 a.m. to 6 p.m. Aug. 29, including a temporary road closure of 6th Street from Ferry to Cass streets.

• Approved the purchase of a groomer for use at Tyler Fields at a cost of $3,195 from Partac Peat Corp. of Greater Meadows, New Jersey. Administrator Ric Huff said the money is coming from a grant from Heico Corp.

• Approved the formation of the Niles Public Art Commission, which will plan and secure funding for the placement of art in the Niles community.