Council votes to raise utility rates

By Nate Smith, Staff Writer

The long debate about electric rates in the city is over as the Washington City Council voted 6-1 Monday to raise utility rates.

Starting July 1, electric rates for customers within the city limits will rise 8.15 percent. For users outside the city, the rates will rise five percent more.

The issue of the 13.15 percent hike for those outside city limits was the most contended issue during Monday’s public hearing about the rates. Mark Troutman questioned the proposed ordinance.

“A person on the west side of town, 100 feet from the city limits, where the power comes in, it will cost them more to get power than someone on the east side?” Troutman said. “I’m not saying we don’t need a rate increase, but I am saying it needs to be fair.”

The questions led to a contentious back-and-forth between Troutman and Mayor Larry Haag about the hike. Troutman, who said he works in the utility industry, said the city is getting cheaper rates for buying electricity and throwing the expense onto those outside the city.

“You are using the people outside the city limits to get a cheap electric rate, but you are going to give that rate to the people in the city limits and stiff people outside the city limits,” Troutman said.

Haag responded with a handout about how many customers were on those outside lines. The average customers on the line is 25.53 per mile, compared to 74.25 customers per mile in the city.

“We are putting a business sense to this,” Haag said. “The city folks have been subsidizing the out-of-city folks.”

Troutman finished by saying no other electric utility he knows of does a rate differential. He left before a vote was taken.

“I can see you (all) have made your mind up (about the rates),” Troutman said. “I don’t think it’s right or fair. I think you are taking advantage of people who are outside the city limits, people who can’t vote anyone in here out.”

But the hearing did not end. Haag then compared the city’s utility system to a bicycle that had a 20-year-old tire.

“We’ve done nothing but patch (the tire) and patch it,” Haag said. “Guess what? We are losing (air). We’ve done nothing but lose $250,000 over the last two years.

Haag also defended the rate differential because there is a difference in structure between the city and those outside the city.

Former State Rep. Dave Crooks, a member and later chairman of the House Commerce and Utility Committee, supported the hike. Crooks, who is also one of Haag’s advisors, said those in Montgomery and other areas outside the city would be getting a price break.

According to a rate study performed by H.J. Umbaugh and Associates last month, an average family of four using 1,000 kilowatts would pay $92.82 a month. Currently, that family pays $85.83 a month in the city.

“Folks, we have a bargain in this city,” Crooks said. “Do the residents of this city own the utility? As an investor in this utility, I don’t have a problem with this differential. If I moved outside the city limits, I probably would. Right now I don’t because when those trucks run to Montgomery to change a transformer in the middle of the night, that’s more gas, more manpower to pay for the people up in Montgomery.

“If it was up to me as one of your investors, if we ran this like a business, you tell Montgomery to latch on to REMC and pay $20 more a month,” Crooks said.

The vote for both ordinances for rates in and outside the city was anti-climatic as no debate was given from council members, only the 6-1 vote.

The lone dissenting voter was current Councilman and former mayor Tom Baumert. Baumert said after the meeting there was not enough saving being cut from the city’s capital projects plan for the rate hike.

“Originally (the improvements) were $1.16 million that we said to take out of it,” Baumert said. “They took $216,000 out of it and they were going to do it over a five-year period.

“Where’s that $800,000 from somewhere. That bothered me. That $1.16 million was a one-time payment.”

Haag said after the meeting that Baumert’s assessment was not correct.

“I fully explained that to him,” Haag said. “We’re trying to clean this up from past administrations.”

Haag also commented that Baumert is a city council member and has the right to vote however he chooses. The mayor and former mayor have been in contention before about several issues facing the council.

Haag said after the vote that there is never a good time to raise utility rates.

“Given our current situation, we had to do this to keep the lights on,” Haag said. “We will continue to look at efficiencies and keeping the lowest rates we can in the city.”

In other utility news, the city will have to borrow $381,000 from the water utility for the month of June. Clerk-Treasurer Elaine Wellman told the council that due to the delay in property tax collection, the city will need the funds to keep going.

“This is something the city has done before,” Wellman said.

In the introduced ordinance, $350,000 will be used in the city’s general fund and $31,000 will be used to pay bonds on the city hall renovation. The ordinance will be up for adoption at the June 22 council meeting.

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