The Gothenburg City Council is forced to make some very difficult decisions sometimes, one of those being raising utility rates for local consumers.
City Administrator Gary Greer addressed the council Tuesday, Nov. 16 saying he understands it’s not an easy choice, but current circumstances leave little option.
Each year the utility rate ordinance is reviewed to evaluate the need for rate changes, Greer said.
Such research includes reviewing the market for similar sized cities, national consumer price indexes, and supplier costs.
In 2020 the only rate increase that was implemented was in water charges to pay for the 2021 infrastructure upgrade project. Otherwise, utility rates have not changed since 2016.
“The consumer price index has increased 6.2 % causing a surge in the cost of doing business,'' said Greer. “This year’s review indicates a need to bring in additional revenue for the electric, sewer and solid waste enterprises. The main reasons for the need for higher rates include inflation in operational costs and increased direct costs from suppliers.”
Electricity rates under the new ordinance are proposed to increase 5%. Greer explained that this increase will bring in approximately $250,000 in revenue to offset revenue shortfalls. “Costs have skyrocketed in electric supplies. Across the board, supply costs are increasing and needed supplies are hard to acquire."
Additionally, NPPD has announced the annual Production Cost Adjustment (PCA) will be phased out over the next two years. “This rebate has allowed the City of Gothenburg to enjoy approximately $300,000 in extra revenue annually. It is prudent to get ahead of this drop in revenue currently so that our customers don’t experience huge increases in the next few years,” Greer explained.
Sewer rates are also not keeping up with costs and are proposed to increase 5% to address increases in cost. Supplies and materials for the sewer operation are also increasing to the tune of 20-50%. Greer said this increase will bring in approximately $35,500 in revenue annually to support sewer operations.
Finally, solid waste rates are proposed to increase 6% to offset inflation and to respond to increase in landfill rates, which in Lexington are going up 6%. “Cost in the solid waste hauling has increased and it is more difficult to find employees to operate equipment,” said Greer. “It is projected that the proposed increase will bring in $29,520. Most of this revenue will be realized by garbage haulers, with some going to the city to offset inflation in billing, tree lot, and clean city operational costs.”
Following the presentation the council approved the ordinance. The new rates will go into effect Jan. 1, 2022.
The council also approved a resolution specifying how Keno dollars will be utilized by the City.
Greer explained that the State of Nebraska does set guidelines on how those funds can be used, but it is up to each city to decide how to delegate those.
Currently there is only one business in Gothenburg that provides Keno gaming; however, when Good Life Gothenburg opens next year it will also be offered there. Greer said he thought it was important for the city to have this resolution in place prior to that time.
City Parks Director Noah Dea presented a proposal for the purchase of a new 72” zero turn mower, which was budgeted this year by the council.
Dea said the city received two bids, one coming in well below the budgeted amount of $14,000. The council approved the bid from Akrs-John Deere of North Platte for $10,450.