By Pat Hammert El Reno City Council took a pass on hikes to utility rates and will form a task force to look at the city’s sanitation operation. Council member Julie Rozsypal proposed a study be done to determine if El Reno could provide its own garbage service profitably, rather than outsourcing the service. The current private contractor, IESI, raised its rates last month, a cost that officials say must be passed on to the consumer. On Tuesday, the Council agreed to form a task force that will review costs of sanitation services and postponed action on raising water and sewer rates to match inflation. Financial consultant John Wolff of Municipal Finance Services Inc. presented a utility rate study for all three services that outlined a 5.4 percent increase in water and sewer rates. In addition, it recommended an increase of $2.77 a month on sanitation services. All three rate increases would cost the average user about $57 more a year. It would, however, have the effect of boosting the city budget by $340,737 each year. Wolff said that increase would help a budget whose leaders have planned to spend more than the city will probably collect in sales taxes, water, sewer and sanitation revenues this year. “You have budgeted more than you expect to take in,” Wolff told the Council. “You have budgeted to spend part of your funds balance,” the carryover from the previous year. The Council accepted the rate increase from IESI but extended its contract only until the end of the fiscal year June 30. Other contractors will be asked to submit a bid for the city’s garbage hauling. Councilman Tony Maldonado said the current waste hauling contract should have been advertised for bids some time ago but that was not done. “I don’t think we should pass a mistake by the city onto the customer,” he said. Leaders have been looking at the rate issue since the prior Council was in office earlier in the year. In March, members opted to address utility rates during budget meetings but the budget was passed without a rate review. Water rates for residential customers were last increased in 2003 by about 30 percent, an adjustment that cost the average user about $52 a year. The administration at that time recommended the rate increase because of a slowdown in sales tax collections, a slim rainy day fund and the need to give personnel raises. “(That rate increase at that time) was tied not to CPI but what the financial picture looked like at the time,” Wolff said. “It was a catch-up mechanism,” whereas now, the increase must be looked at to keep up with costs to operate the systems. El Reno’s water rate is the second highest of six other cities of similar size, according to a 2004 rate study done by Oklahoma Municipal League. “Before I can entertain a rate increase, it’s important for me to look at where we can cut expenses,” said Rozsypal. She asked where the income could be used if the city sold some excess property near its well fields. Wolff said its sales proceeds could not be used to pay down debt service, but only for capital needs of the water system. Rozsypal said the recommended increase for water and sewer is “not unreasonable.” The recommendation is to increase the current minimum on water from $10 to $10.54 and for every 1,000 gallons used over 1,500 gallons, the rate would increase from $2.87 to $3.02. On the sewer rate, the recommendation is to increase the minimum from $7 to $7.38 and for every 1,000 gallons used over 1,500 gallons, the rate would increase from $2.11 to $2.22. “It’s the sanitation I have a problem with. So if we can address that, we should,” she said. The proposal is to increase the base rate for a garbage polycart from $12.80 to $15.57 to reflect the increase from the hauler. Rozsypal has researched Edmond’s city-operated sanitation system, comparing it to El Reno’s. “Where Edmond actually keeps on top of costs is the fact that theirs is a fully automated system,” that holds down personnel costs, but it also means no alley pickup, she said. Edmond’s 25,000 customers are charged $8.25 per polycart and leaders have built-in automatic increases in 2007 and again in 2009. But City Manager Doug Henley said comparing Edmond’s to El Reno’s situation is like “comparing apples to oranges.” For instance, Edmond’s sanitation superintendent calculates in most parts of that city, a house can be served in 15 seconds, particularly in the new subdivisions. Henley said that rate of efficiency is not possible in El Reno where alley pickup is still being provided and where cars are parked on streets, causing a slowdown for garbage trucks. Still, Rozsypal said if her calculations are on target, El Reno could lease-purchase two sanitation trucks, run its own service and still realize an adequate profit. Henley said city staff is preparing a feasibility study on what other cities of similar size are doing with their sanitation system. Meanwhile, the Council has approved a task force made up of two Council members and a resident from each of the four wards to study the issue. The revenues from utility services must be shared between plant operations, capital projects, the general fund, water resources loans and a 2005 sales tax note from refinancing some old loans to achieve a fixed interest rate. Henley said the Council understands incremental increases should be made to match the consumer price index. “There is an increase in the cost of operating the city in general. Every city is going through this; just take fuel costs and that’s just one item. If you look at your own home budget, things increase over time, and city budgets are no different,” he said. An automatic, but slight, increase every year takes the heat off city leaders who must make the tough decisions, he said. El Reno’s Council operates under an ordinance that requires it review rates each year in March to adjust it to the consumer price index. “What that does, then, is take the politics out of the decision and allows for reality to set in,” he said. He said the rate issue will be an agenda item at next month’s meeting. He said the Council wanted to wait until all members were present. Councilman Paul Atkins could not attend Tuesday’s meeting. In other action, the Council denied three tort claims from residents who say they received damages to their cars from a ditch on Rock Island Avenue as workers fixed a water main break.