Council Reviews Proposed Rate Changes

The Sidney City Council spent much of the Dec. 10 meeting discussing rate changes for water and electricity services. On one side, the City is in an unusual dilemma of a wet year, and what that will mean for the water department revenue. On the other is the cost of electricity and if the rates can be adjusted to plan for the future and  stay friendly for customers.

In City Manager Ed Sadler's proposal, the council would review the base rates of both services to increase revenue for ongoing fixed costs. Water base rates were restructured about three years ago, Sadler said in his memo, to address actual user size as the basis for base rates. The water unit rates remained the same at that time. However, electricity rates have increased twice in the last four years; both times were to address new transmission cost increases.

The proposed change is for the base rate for water consumption at $1.30 per 1,000 gallons for the first 30,000 gallons used, $1.50 for each 1,000 galls for 30,001 through 60,000 gallons consumed, $2 per 1,000 for 60,001 through 90,000 gallons consumed and so on.

Sadler recommended no change in the water rates, but an adjustment to the base rate. He proposal calls for an increase in the base rate from $12 to $15 per month for residential customers. For larger users, base rates will increase from $15 to $19, $50 to $62.50, $100 to $125 and the largest users monthly base rates will increase from $200 to $250.

Electric rates will see a decrease, according to the proposal. Sadler proposed a overall rate decrease, and a” restructuring of rates to better reflect actual costs incurred by the utility,” according to Sadler’s proposal. His proposal calls for an increase in base rates to better address costs that remain regardless of consumption. He said electricity costs the same regardless the time of year, or how much is used. He added the proposal for “demand charges” and “KWH” charges moves the city toward making charges the same for everyone, all year.

“The most anyone’s rate is going to go up is $50,” Sadler said.

Vice-Mayor Joe Arterburn objected to the proposed rate changes, saying he thinks the City should explore other options.

“Joe, I agree with your premise, but it’s a minimal base rate change,” said Mayor Roger Galloway.

Councilman Bob Olsen encouraged the council to seek the most painless way to fund the two utilities.

“If we need to do it, let’s do it with the least obstruction,” he said.

First reading of the proposed rate changes were approved 4-1, with Arterburn voting against them.

Sadler said that overall utility bills should decline $4.5 percent to $11.9 percent.

Three readings are required for the rate changes to be approved.

Cheyenne County Chamber of Commerce President Hope Feeney then presented her quarterly report. She said the Chamber has contacted 50 entrepreneurs this quarter. Contacts were based on a marketing leakage study of the county economy. Leakage refers to when residents purchase  goods and services outside of the local economy. Analysts define it as a leakage when a consumer chooses to purchase outside of the county what is available in a local market. Some analysts also consider goods and services that are not available in the local economy, forcing consumers to purchase elsewhere.

“They are sent an informational packet about the area,” Feeney said.

She added the packet includes an overview of the community and the economy. She also said follow-up is made with each company contacted.

Feeney said the Chamber is focused on retail businesses.

The Chamber is also promoting business properties available for purchase or lease.

She said the Chamber is also still seeking funding to complete the Hickory Street Square project. The Chamber recently applied for a $24,000 Black Hills grant. Overall, the project needs about $110,000 to get started.