By all indications, the Duncan City Council will vote to increase the electric rates that are paid by customers of the city-owned power utility.
“It’s unavoidable,” said 2nd Ward Councilman Mike Nelson, the city’s vice-mayor.
“If we’re paying more for electricity, we’ve got to charge more for it.”
The council meets at 5:15 p.m. today to vote on an 8 percent rate hike that is recommended by City Jim Frieda.
The increase would hike the monthly base rate for residential customers by $6.46.
Mayor Gene Brown did not return telephone inquiries about the proposed rate hike, but Nelson, who just began his second term on council and is the city’s vice mayor, said he feels compelled to support Frieda’s recommendation.
“My job with the city is to make sure we’re solvent,” he said.
The Oklahoma Municipal Power Authority, which provides Duncan Power with its electricity, told the council in November that its costs in acquiring energy were on the rise.
“I thought we should have done it then,” Nelson said of the proposed city rate hike.
The power authority’s chief financial officer is scheduled to appear before the council at today’s meeting to explain the increased costs it has incurred.
The city has been struggling with decreased cash flow because of a precipitous drop in water sales revenue due to rationing brought on the ongoing drought.
Utility revenues, including water, sewer and electricity, are relied up by the city to help pay its operating costs, which includes payroll.
Duncan has been operating without filling 19 vacant positions, but the council did approve a 2.5 percent pay hike for non-union employees that went into effect on Jan. 1. Non-union employees had not received a pay hike in four years, according to Nelson.
“It was just the right thing to do,” Nelson said.
Frieda, the city manager, has stated the city would risk losing workers to the drilling industry if they went without a pay raise this year.
The city’s police officers were granted a 3 percent pay hike last month. A new collective bargaining agreement with firefighters has not yet been brought to the council.