City considers six percent utility rate increase

The annual conversation about utility rates took a different turn this year when it transpired that the end of the Specific Purpose Option Tax (SPOT) means the Sundance City Council will be obliged to consider a six percent rate increase across the board. Public Works Director Mac Erickson was also able to present a detailed analysis of garbage rates across town at a business-by-business level.

Clerk-Treasurer Kathy Lenz offered the proposed increase on base rates across the board, to include sewer, water and garbage. The reason a six percent increase is considered necessary, Lenz explained, is that the SPOT voted on during the 2014 election is nearing collection.

SPOT appears on the ballot as a fixed amount to be collected, which is done via sales tax until the total has been reached. Lenz presented a letter from Crook County Treasurer Mary Kuhl, which explains that the specified balance voted on during that election has nearly been collected.

The balance voted on was $1.25 million per entity in the county or $6.25 million in total. The first SPOT payment was received in June, 2015 and monthly distributions have taken place since that date, according to Kuhl.

The final distribution of $30,720.64 will be sent to the towns and county in November and the excess collected will be held for a year and then distributed according to statute. The sales tax rate for Crook County will decrease from six to five percent effective January 1, 2020, according to Kuhl.

While SPOT will appear on the ballot at the 2020 elections, said Lenz, if it passes again it will likely be up to a year after the election when the first distribution is received. For this reason, it is necessary to ensure the city’s enterprise accounts are paying for themselves.

Meanwhile, Erickson told the council that he has been working to update the information associated with garbage accounts. Some of it is extremely outdated, he said; for example, the old rate schedule showed the Longhorn Saloon and Bar when it was still just a bar.

The goal, said Erickson, was to gather information about the number of cans each business is actually using and what volume each is generating. At the moment, he said, some people are paying the same price for five containers as others are for one, due to the rate schedule being outdated.

Other considerations that the rate schedule should bear in mind, said Erickson, include the seasonal nature of some businesses. A campground does not need as many garbage cans in the winter as it does in the summer, for example.

Mayor Paul Brooks commented that, “What Mac just did is really a logical progression”. He referred to the work done by the council over the last few years to fix the finances of the city.

In the old days, said Brooks, the accounting was not as clear is it is today and the city had no appetite to have a grant writer. Most money was spent at the end of the year in a “Christmas shopping spree”.

Eventually, he said, it became necessary to backwards engineer a budget and ask a rate-setter to use that budget to set rates. However, because the accounting had not been accurate, those rates became skewed.

Nowadays, said the mayor, the city has a much firmer handle on the actual costs of providing water, sewer and garbage. Accuracy has meanwhile become more important now the city is hauling garbage rather than burying it, Lenz added.

“This is cohesive and a more true representation of what customers are using,” commented Lenz regarding Erickson’s proposal.

Approving of Erickson’s work, Brooks made the point that it increases fairness across the city’s customer base and does not give preferential treatment to anyone.

“Some of those costs are fixed costs, like them or not,” he said of such things as dumping fees and hauling costs.

“We can’t excuse the cost of doing business.”

The point was made that utility customers need to work with the town if they feel their rate is unfair as other people are using their containers. Dumpsters within Sundance are only available to those who are paying for them, he added.

“If you’re paying a rate, you’re golden. It’s the ones who are not,” he said, asking customers to let the city know if they feel such abuse is taking place.

Brooks also issued a reminder that business owners who live outside town do not have the right to bring their garbage from home to use their business utility account.

“You need to police your cans, because this is volume specific and we obviously have some outside [trash] coming in,” said Council Member Joe Wilson.

In answer to a question from Council Member Jana McLean, Erickson confirmed that recycling rates will be the next to be considered. No decisions were made regarding the rate increases to give the council time to review the proposals in detail before putting them to a vote.