Proposed Rate Adjustment Will Keep Infrastructure Upgrades on Track

Modernizing water and sewer services is an investment in Starkville’s future

Starkville Utilities is recommending an adjustment in water and sewer rates that, if approved, will fund planned upgrades to benefit customers well into the future.

To support the utility’s five-year capital improvement plan, more than $25 million will be invested to replace aging portions of the city’s water and sewer services and update critical components at its wastewater treatment facility.

“Our goal is to complete critical infrastructure upgrades while limiting financial impacts to our customers as much as possible,” said Terry Kemp, general manager of Starkville Utilities. “In addition to improving service, our plan saves money in the long run by avoiding repairs and outages caused by aging, outdated infrastructure. It’s the right investment at the right time to keep our system operating safely and reliably for years to come.”

Starkville Utilities is nearing completion of a water and sewer upgrade project in Pleasant Acres, which involved replacing all water and sewer infrastructure. Similar projects are being planned in Green Oaks, Rolling Hills and Oktibbeha Gardens as well as other areas of the city – all of which will require significant capital investment over the next five years to replace and update aging infrastructure.

Kemp presented the rate proposal to city aldermen during their board work session on Aug. 14. Based on the current proposal, Starkville Utilities plans to generate an additional $1-$1.5 million annually for capital improvements.

In 2018, as part of a proactive approach to address future utility needs, the board of aldermen approved a rate adjustment to provide needed funds for water and sewer upgrades. Analysts at Mississippi State University’s Mississippi Water Resources Research Institute provided rate options to support an anticipated $7.2 million annual budget to fund infrastructure projects.

However, after implementation and more detailed analyses with MSU researchers, it was found that the rate adjustment did not generate the needed revenue to ensure capital plans could be achieved.

The proposed new rate adjustment addresses the revenue needs and positions Starkville Utilities to move forward with its capital improvement plan.

After analyzing multiple rate scenarios developed by the Mississippi Water Resources Research Institute, Starkville Utilities recommends an option that raises base rates for water and sewer service from $4 to $4.50 and sets a variable rate of $4.15 per 1,000 gallons. The first 1,000 gallons of water usage is still included in the base rate.

If approved, the adjustment will raise monthly water and sewer bills for most customers by $2 to $5 while generating annual revenues of $7.5 million.

“It’s a relatively small increase that will result in significant benefits for our customers in the future,” Kemp said. “This proposed new rate will provide necessary funding for ongoing capital investments over the five-year project schedule.”

Kemp noted that even with recent increases, Starkville Utilities customers still have some of the lowest water and sewer rates in Mississippi when compared to similarly sized municipalities. By taking a proactive, phased approach to replace aging systems, Starkville Utilities’ strategy is to control costs over the long term so that rates remain affordable.

“These planned infrastructure upgrades are funded strictly by rates, not taxes,” Kemp said. “Before 2018, our water and sewer rates rose only two times over a 30-year period, and we are committed to managing costs and making the right decisions to ensure our customers continue enjoying reliable utility services.”

A detailed summary of the rate proposal and impacts to customer bills is available on our website.

Starkville Utilities is a public utility serving 14,000 residences, businesses and industries in Starkville, Mississippi as well as Mississippi State University. Its mission is to supply safe, reliable, and cost-effective electric and water service of superior quality and value that improves the lives of its customers.

We are a Water and Electric Utilities Company in Starkville