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Water, sewer rate hike may be needed

Tuesday, October 5, 2004

SIKESTON - Electricity prices for Sikeston residents and businesses should remain stable, but water and sewer prices will need a rate hike.

Ed Throop, executive director of the Board of Municipal Utilities provided City Council members with a "report on its financial condition" as well as a "thumbnail sketch" of recent BMU activities during the regular City Council meeting Monday.

BMU has been in "cost-cutting mode" over the last couple of years, according to Throop, "to keep our cash position at least even." Wholesale business has been subsidizing the local retail users, he explained, since 1987.

"We are going to keep our electrical rates where they are hopefully for the next 2 to 3 years," Throop said. This should be achievable in part due to a $1 million rate stabilization fund which will be tapped before raising rates.

Equipment replacements are slated for the near future, however. And while BMU was able to retire $5.3 million of debt over the last year, there is still over $190 million remaining.

BMU has seen a loss in its Internet access endeavor. Throop described it as "a very competitive business," although power line communication technology in which Internet access is made available through power lines and ordinary electrical outlets may change things in the next couple of years.

The bad news, Throop said, is that the city's water and sewer departments are suffering.

With an increase in mandates, prices rising on water treatment chemicals and the systems getting old, costs are now exceeding revenues by about $300,000 each for water and sewer.

Throop said a water/sewer rate increase is inevitable - "maybe in the next year or two."

On a brighter note, Throop said facts and figures indicate that "Sikeston is growing."

BMU, which may be ranked among the top 25 utilities in the nation, continues to work on improving its reliability, he said.

Fielding a question from Councilman Michael Harris about the possibility of a second power plant, Throop said there is "nothing in the near future" as transmission updates are needed first.

Asked about the coal situation, Throop said BMU is responsible for the 115-car trains coming through every four days with 13,000 tons of coal, and expressed concerns about proposed increases in area train traffic which may interfere with the city's coal deliveries.