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City Council approves first reading of ordinance increasing utility rates

The City of Gillette's Wastewater Treatment Plant. (County17/File Photo)

GILLETTE, Wyo.—The Gillette City Council on Tuesday passed the first reading of an ordinance to raise millions of dollars in additional utility revenue by increasing the average residential bill by nearly seven percent.

The need for the additional revenue, approximately $2.9 million, was identified and presented to the council with a recent proforma report that indicated rate increases were necessary in nearly every city utility fund- water, power, and sewer- mainly to keep up with inflation but also to contend with an increase in service costs, according to City Administrator Hyun Kim.

During their regular meeting on March 15, the council voted to approve the first reading of an ordinance that, should it pass two additional public readings, would increase the average residential utility bill by 6.7 percent, or $12.83 per month.

Over the course of the next year, the city utility departments plan to spend around $55 million as they move to comply with new water line inspection and replacement requirements, replace a depleted power fund reserve, and move forward with an ongoing project to replace the existing wastewater treatment plant, per Kim.

The new water line guidelines have only recently come into play with a new addition to the federal government’s Safe Drinking Water Act that requires the city to inspect all water lines in the city and replace any of them that are made of lead.

“The fact that we have to inspect every water line, as well as replace every line, service lines included, in the City of Gillette, that is daunting,” Kim said. “So, we are prudently looking at how we are going to accomplish that right now.”

In the city’s electrical fund, more than $8 million in reserves were wiped out due to skyrocketing gas prices in the aftermath of the Texas power grid failure in 2021, during which time most of the city’s baseline capacity was heading south and power demands warranted the activation of city-owned gas turbines, per Kim.

The rate increases in the city sewer fund are centered around the wastewater treatment plant that is currently referred to as the Headworks project, a $20 million project that the city took out a loan for to keep residential rates from drastically increasing but will need to begin paying back.

“Because quite frankly, if we did not take on debt, the rate increase would be unpalpable to our customers,” Kim explained.

The rate increases are being subsidized with funds from the Optional One-Percent sales tax, without which the projects planned could not be completed, per Kim, but even without those projects, utility rates would inevitably increase moving forward to keep up with ever-increasing service costs across the board.

‘This is not something that we planned for, no one could,” Kim said, adding that residents are seeing the results of inflation for themselves in different ways, such as increasing grocery prices.

The city administrator acknowledged that the rate increases could have an adverse effect on residents currently living on a fixed income, however, he made it a point to publicize the city’s senior citizen and disabled resident program.

Essentially, the program provides a 50 percent subsidy from city utility funds that help those resident’s pay their utility bill, assuming they are over the age of 65 or are deemed disabled through the social security administration.

To qualify for the program, the income threshold for a single household cannot exceed $32,225 and $69375 for a family of four, Kim said.

In the end, the council passed the ordinances first reading with six votes in favor, none against, and Mayor Eric Hanson absent.

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