FARMINGTON – While other topics were discussed during the Farmington City Council meeting Monday night, none seemed to matter as much as a quick vote to raise electric rates another 16 percent – on the heels of a 29 percent rate increase just over five months ago.
The total electric rate increase to customers now in the past year stands at 45 percent. People are unhappy, and one councilman says customers should not take out their frustration on utility clerks at city hall.
&#8220(The clerks) can’t help it. They’re just there doing their job,” said Councilman Larry Forsythe. Still, clerks and others around the community have heard the buzz about rapidly climbing electric rates … and that buzz will likely continue after Monday night.
Council members voted 5-1 to raise rates another 16 percent effective with the March billing cycle. Council woman Jeannie Roberts voted against the measure, citing a roughly $500,000 surplus in the electric fund as of February.
Still the remainder of the group voted in favor of the rate increase. City Administrator Greg Beavers says Ameren UE notified the city of a 15.5 percent rate increase in January. He says there’s no reason to believe the rate charged by Ameren UE will drop at any time this year, and the city needs to pass along the cost increase in order to turn a small profit which will be passed along to the general fund for operation of city services.
The city owns and operates its own electric utility. Power is purchased through a purchasing &#8220pool” of cities in order to buy in bulk and secure a better rate. Still, the power is transmitted across Ameren UE lines and equipment to reach the city.
In years past the city would profit by several million dollars annually. Those profits, any made above operating costs for the year, would be transferred to the general fund. Many years the city would lose money or break even on water and sewer service, but make a good profit on electricity sales.
Last year, due in part to increased electricity costs and budgeting concerns, the city reportedly lost money on the electric sales, according to the city administrator. With the rate increases to customers in the late fall and again Monday night, offset by Ameren’s increased rates, the department is set to make a profit of about $250,000 this year – which will be transferred to the general fund.
Councilman Jeannie Roberts asked that the rate increase be tabled until more information about rate projections could be gathered from Ameren UE. Mayor Charles Rorex explained that the city was already running a month behind on the increased cost from Ameren UE, and it would make more sense to raise the rate now and have the option of lowering the rate for customers later in the year.
Roberts indicated she didn’t think that would happen. She cited a conversation with a resident who is living on a fixed income of $900 a month, and said people on fixed incomes cannot absorb continued increases in utilities. She asked that the council look at trimming the city’s budget instead of relying on profits from the electric utility to fund general operations.
Despite Roberts’ motion to table the matter, no second was made by another council member. Rorex said the group would proceed and the matter was read by counsel and called for a vote. Council members Dave Holman, Scott Semar, Clarann Harrington, Rusty Straughan and Larry Forsythe voted in favor of the rate increase, effectively passing the latest Ameren UE increase along to customers. Roberts voted against the increase, while councilmen Jim Kellogg and Jim Bullis were not in attendance at the meeting.
Councilman Forsythe did ask that the city consider drafting a letter of explanation and passing it along to electric customers. It was decided the city administrator will draft the letter and have it distributed starting in March.
Rates aside, council members heard a crime statistics report from Police Chief Rick Baker, learned of activities at the public library, and heard that sales tax revenues are running about 2 percent ahead of budget, and 3.5 percent ahead of last year at this time.