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Council approves utility rate increases - again

November 15, 2013

For the second consecutive year the city’s 2-year-old wastewater treatment facility is being blamed for an increase in sewer use fees for Broken Bow city utility customers.

It was not a popular decision, and one all four council members said they wish they did not have to make, but they did. For the second consecutive year, the Broken Bow City Council unanimously approved a rate hike Tuesday for city water use fees and for city sewer use fees.
The votes on the two ordinances came following lengthy discussion on the issues, led by Water & Sewer Superintendent Darren Marten. Marten explained to the Council that each year the Rural Water Association comes in to and does an overall survey of the community’s utilities and then makes recommendations accordingly.
This year, that board recommended the city raise their water use fee by 4 percent. However, the city’s Utilities Board was not comfortable with that, and on their behalf Marten made the request to the council of a 3 percent increase. That would raise the base rate from the current $14.10 per month to $14.52 per month, and the cost per gallon from $1.47 to $1.52. This increase would generate an additional $27,400 for the city’s water fund.
Marten explained that the city has experienced increases in the cost of electricity and gas. These increased expenditures, along with the rising cost of repairs and improvements to the infrastructure of the city, has forced the utility department to increase the rates to keep up. That was the same argument he made last year, when the council agreed to a 3 percent water use fee rate increase in September 2012.
Councilman Cody Schmick voiced his disapproval over such a hefty increase, and suggested a rate increase of 1.5 percent rather than the 3 percent the Utility Board recommended. Marten said his only concern with that was the possibility that by not raising the rate enough now, they may have to come back next year and ask for an even greater increase.
“Years ago, Broken Bow bragged about having one of the state’s lowest utility rates, and that’s how our infrastructure fell behind,” Mayor Cecil Burt chimed in. “I don’t like rate increases either but we have to take care of our infrastructure.”
Councilman Kelly Clay agreed that he would rather not force a rate increase on the citizens of Broken Bow, “but I’m just concerned about the amount of water main that still needs replaced,” he said.
Marten said his department was well aware that replacing the water mains along Highway 2 from Pump & Pantry to the Catholic Church was going to be very costly. He says they have been putting money into a contingency fund for quite awhile to help alleviate that expense, and they split the project into three phases.
Phase 1, done this year, replaced from Pump & Pantry to Casey’s. Next year, the project will replace mains from Casey’s to Highway 21, and the following year from Highway 21 to the Catholic Church. Each phase of that project is around $1 million.
The discussion on the water use fees finally ended when Schmick made a motion to approve a rate increase of 2 percent across the board, which was approved.
The council then turned their attention to the sewer use fee ordinance. Again, Marten explained that the Rural Water Association recommended a sewer rate increase to the city of 14 percent. The Utility Board recommended to the council a rate increase of 8.5 percent, increasing the monthly base rate from $19 to $20.62, and from $2.30 to $2.50 per 1,000 gallons used.
Marten reminded the council that the new waste treatment facility costs about $600,000 per year to operate. This was the first year the city has had to pay full payments on the plant. They have a bond payment of $309,000, and spend about $150,000 per year on sludge removal.
In September 2012, the council approved an increase of 12 percent on sewer use fees in an attempt to keep up with the cost of the facility.
“Is there any way we can tighten up this rate increase?” Schmick asked Marten.
Marten responded, “With our debt, I just don’t see how.”
All council members stated this was a much higher rate increase than they would hope to pass at once, but given the circumstances felt they had no choice. After unanimously approving a 8.5 percent sewer use fee rate increase, Council President Chad Schall reminded Marten that his department must work on ways to try to streamline these costs.
The council waived the three readings of both ordinances. Customers are not expected to see the increase on their bill until February 2014.
In other business, Mayor Burt opened two bids received for a new street sweeper for the city. Street Superintendent Monty Clark explained that the city typically rotates a sweeper every four or five years, and he has budgeted $26,000 per year for the next five years for a new unit.
There was about a $25,000 difference between the two bids, and though the Elgin unit was the highest bid Clark recommended going with that one. He said he is familiar with the Elgin and he believes it is just made a little better, explaining the difference between the Elgin’s belt system and the other machines chain system. Clark says the Elgin also has safety features the other machine does not offer.
The annual payment for the Elgin would be $26,500 - just $500 more than the budgeted amount. However, Clark says he is confident this machine will last a year or two longer than the others. The council agreed and approved the bid $132,752 by Nebraska Environmental Products for the Elgin sweeper.
City Administrator David Varley also brought the council up-to-date on the 5th Avenue project. The council approved an agreement with Mid State Engineering for a geotechnical engineering study between Highway 2 and Memorial Drive. Varley says the engineering study is expected to be completed by December so bids for the project can get out in December or January.

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