Alva Review-Courier -

As the City of Alva approaches the beginning of a new fiscal year July 1, the city council is working on next year’s budget. With the economic downturn in the state and in northwest Oklahoma, the council is faced with some difficult financial decisions. So far, the city has managed to retain all employees and continue services to citizens. The city is operating with fewer employees since many who retired or took other jobs have not been replaced.

In a letter to citizens of Alva published in the Alva Review-Courier April 2, Mayor Kelly Parker said, “Even with extreme measures in expense management, revenues are not enough to fund our basic municipal functions.”

Parker explained the FUTURE of Alva proposal. FUTURE is an acronym for Fair and Uniform Treatment of Utility Rates Endeavor.

A series of public hearings or town hall meetings is planned to allow citizens to ask questions and express their thoughts about proposed utilty rate increases. The first of those meetings is set for Tuesday, April 11, at 6 p.m. in the city council chambers, located between the city office and the fire department.

City of Alva Revenue

For the current fiscal year ending June 30, the city budget listed revenue totaling $10,582,332. Using the revenue received for the first three-fourths of the year, the city can expect actual revenue of $8,167,423. That’s a shortfall of $2.4 million.

Obviously, prices for everything are going up. The city can expect that expenses will rise as costs such as insurance, fuel, electricity and other supplies increase. Employees are due pay raises, too.

In light of this, the city has estimated revenue needed for next year’s budget at $9,577.695. That’s less than the $10,582,332 budgeted for this year but more than the expected actual revenue.

Looking for Revenue

With sales and use tax collections continuing to decrease, the city must look for ways to bring in more revenue. Increasing sales tax is not a likely option. Right now merchants in Alva collect 9.25 percent which is one of the highest rates in the state. It’s unlikely that Alva voters would approve an increased tax, and local business owners would certainly be against it.

After removing the 5 percent tax that goes to the state and county, the city receives the remaining 4.25 percent. Of that, 1.25 percent goes to support Share Medical Center, 0.5 percent goes to the Alva Recreation Complex and 0.5 percent goes to scholarships at NWOSU. These earmarks were voted on by citizens and cannot be changed by the city. That leaves only 2.0 percent for city operations.

While the city may still increase charges on other revenue sources like traffic fines, building permits, etc., the next largest revenue source is utility rates. That’s one reason the city is proposing rate increases.

Unfair Rate Structure

In some business models, it makes sense to offer a volume discount. If someone wants to purchase a large quantity of a product, they might expect to receive a somewhat lower price. However, if the product is scarce or in short supply, no discounts are offered.

With modern demands for more water and droughts in Oklahoma that lead to water shortages, the state is encouraging water conservation.

Alva’s rate structure for water, however, does not encourage conservation. When Alva sought grants from the Oklahoma Water Resources Board, the city’s eligibility was denied because the city’s rate structure does not promote water conservation.

Alva needs to improve the current old water storage and distribution systems. That will cost over $2 million that Alva does not have. If the city can’t get grants, the water system will continue in its patched up condition.

Public Hearings

The first public hearing is set for Tuesday, April 11, at 6 p.m. in the council chambers hosted by the Alva Utility Authority (AUA). The AUA oversees the utility department. The board is composed of the city council members.

According to Mayor Parker, more public hearings will be scheduled. You may also speak with members of the Alva City Council about your questions and concerns.

Box: The FUTURE of Alva Proposal

Current minimum bill $54.72

(5,000 gallons)

Proposed minimum bill $58.16

(1,000 gallons)

***

Current average bill $55.15

(5,289 gallons)

Proposed average bill $68.63

(5,289 gallons)

***

Proposed rate samples:

1,000 gallons $58.16

10,000 gallons $84.35

50,000 gallons $224.84

*All rates based on Alva residential utility billing

Box: Sales Tax Dollars

Sales Tax Rate Collected in Alva 9.25%

State of Oklahoma Gets 4.50%

Woods County Gets 0.50%

Alva Hospital Authority Gets 1.25%

Alva Recreation Complex Gets 0.50%

NWOSU Scholarship Fund Gets 0.50%

City of Alva Gets 2.00%

*Note; Alva collects 4.25% sales tax but 2.25% is earmarked by voters for hospital, recreation complex and scholarships leaving 2.00% for the city budget.