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BMU rate increase request presented to Council
SIKESTON — For years, Sikeston residents enjoyed low electric rates without ever seeing an increase. Those days of no increases have passed.
On Monday, Sikeston City Council members were presented with recommendations from the Sikeston Board of Municipal Utilities to consider a three-year cumulative rate increase for utilities provided by BMU. It is the latest in significant increases since 2014, the most recent being a 10.9 percent increase implemented in June 2018.
The proposed three-year rate increase averages 8 percent per year for electric and 12 percent for both water and sewer. For the average monthly bill, which according to BMU is $138.37 with $106.92 electric, $17.50 water and $13.95 sewer, the increase will be an average of $12.15 after year one, $14.61 for the second increase and $17.10 after the third increase.
“Sikeston residents have experienced some of the lowest utility rates in the state for several years. That trend will continue, despite the proposed rate increases,” said Rick Landers, general manager for Sikeston BMU. “And the BMU Board and staff worked diligently outlining what upgrades are necessary while spreading out the impact to our customers over a three-year period.”
The anticipated dates for the rate increase implementation are October of this year for electric and January 2019 for both water and sewer. At the end of the proposed three-year increase in 2021, Sikeston utility rates will be comparable to the majority of Missouri cities’ rates imposed on their customers in 2016.
While Sikeston BMU still boast low rates, the significant increase will have an impact. Resident John Graham voiced his disapproval in Monday’s meeting, saying the increases will be a hard thing to swallow.
“This I think is going to hurt our city more than help it,” Graham said. “What I am seriously concerned about, like this month on my own bill it was double what the highest bill has ever been. You tack on eight percent and then another eight percent and then another eight percent, it’s going to destroy our town from the people that work and try to make a living here.”
Graham added a concern the rising rates would hurt the town’s potential to get new business with the rates being so high.
Mark Beauchamp, president of Unity Financial Solutions, explained the increases at the meeting and said rate increases are always difficult.
“The number one thing, the most important thing is not the price of electricity but reliability of service,” Beauchamp said. “When you turn your light switch on you know it works. These increases, these adjustments, are needed to maintain a reliable system for your customers.”
Landers said existing water production facilities range in age from 41 to 86 years old and near max capacity now. He added that the Department of Natural Resources have imposed additional mandatory discharge restrictions impacting wastewater facilities and the power infrastructure must be modernized to withstand growing electric service requirements.
“Raising rates is never an easy decision and we are very sensitive to the impact a rate increase has on our citizens,” Landers said. “We want the public to know exactly why we must raise rates now.”
With water production plants nearing max capacity now, plans for the proposed increase include improvements to the current plants to support the water needs of the current population and anticipated growth and upgrades of existing wastewater treatment plant to comply with new regulations and discharge limits enforced by the Department of Natural Resources. The plans also call for an upgrade to aging distribution facilities and equipment to help alleviate any performance issues in support of effective power distribution.
Landers said all of the plans are necessary to continue to maintain independent, sustainable utilities.
Landers went on to explain the use of windmills and alternative electric options is one of the reasons BMU has seen their reserves dwindle, forcing consumers rates to increase over the last several years. Some residents in attendance asked about Sikeston getting windmills while another resident asked if at what point does the city say enough is enough and move on from the power plant.
“At the point when we see that it is more economical to go somewhere else (to get our electricity),” Landers said.
He added that if the time comes when the power plant is no longer the best option, that the option won’t be coal and if the option was windmills Sikeston would have to go Kansas or Oklahoma as windmills aren’t an option to put locally because of geographical reasons.
“Regardless of what happens here over the next few weeks, I would certainly like to see BMU educate the community as to what the (electric) options are going forward after the power plant reaches its useful life,” said Sikeston Mayor Steven Burch.
Council will vote on the increases at their Sept. 10 meeting.
“It is important the BMU gives residents time to prepare for the impact (the increase) will cause on household monthly budgeting,” Burch said. “No one wants an increase in their utility rates, but these infrastructure improvements must not be postponed any longer.”
In other action at Monday’s meeting, Council:
• Was briefed on the possibility of allowing golf carts on some city streets and what a proposed ordinance may entail.
• Approved the demolition of four structures that are an immediate health and safety hazard. The properties are located at 315 Alabama, 402 William, 309 Jaycee and 1510 W. North.
• Heard the first reading of a bill putting a four-way stop sign at Wakefield and N. Ranney.
• Heard the first reading of a bill to put a stop sign at Glacier and Yellowstone.
• Heard the first reading of a bill to rezone property located south of Brunt Boulevard and north of US Highway 60.
• Heard the first reading of a bill that would create a subdivision of 16-single family lots at the South Ridge Estates.
• Approved authorization to enter into a real estate contract to purchase real estate from David K. Lape Farms, Inc., for the future construction of a well and water treatment plant.
• Established 2018 property tax rates for Sikeston. A small increase was approved. For a $100,000 home the increase will be $4.
• Rewarded a bid for a box blade grader with a transit to Brandies for $13,802.40.
• Approved the purchase of 125 tons of DuraEdge Professional Infield Material and 50 tons of DuraTrax Warning Track Material from Advanced Turf Solutions for $23,050 for the installation on the Field #1 and Field #2 at the Sikeston Recreation Complex.
• Approved a bid to renovate Field #1 and Field #2 at the Recreation Complex for $30,615.47 to Advanced Turf Solutions.
• Moved the remaining items on Monday’s agenda to the Sept. 10 meeting.