Orangeburg Department of Public Utilities: Water, sewer rates going up; no increases for electric, gas rates

Under a budget being considered by Orangeburg City Council, the average customer inside the city limits could see an increase of approximately $1.71 for water and $3.24 for wastewater per month, according to DPU. That’s based on 600 cubic feet of water used per month.

The average customer outside the city will see increases of $3.42 for water and $6.48 for wastewater.

The changes will bring in an additional $1,193,644 in revenue for the water division and $911,446 for the wastewater division.

“It does not get us to where we need to be at this point, but it does close the gap with respect to where we are today,” Orangeburg DPU Manager Warren Harley told City Council at its Aug. 2 meeting.

Harley said the rate increase will be spread out over time.

“We will bring a portion in this budget and in subsequent budgets there will be recommendations of other increases in the future,” Harley said.

Water and wastewater rates were last increased in 2017.

DPU officials say the increases are necessary due to increased cost of treating water and wastewater.

“The proposed operating and capital budget for the Department of Public Utilities focuses on maintaining our current operational service levels and it also seeks to absorb some cost increases associated with the inflation and the cost of goods and services that we are experiencing due to economic conditions,” Harley said.

Council gave first reading to the utility’s budget on a 5-1 vote. Councilman Richard Stroman was opposed. Councilman Bernard Haire was not in attendance at the meeting.

“I am not in favor of increasing water and wastewater,” Stroman said. “When you have a business, sometimes you make money in certain parts and don’t make money on other parts. I think you can go out and make more money on gas.

“I just don’t see right now. People are having a hard time paying bills. I just can’t put this on them.”

DPU officials say despite the increase, the utility still has among the lowest combined water and wastewater rates around.

DPU electric and gas rates will not increase.

DPU’s budget includes projected operating revenues of $114.1 million and operating expenses of $100.3 million for a year-end net projected profit of $13.9 million. When other expenses are considered, the utility’s net profit for the fiscal year is projected at $13.1 million.

Harley noted, “We are seeing increases in our power supply contract.”

“Much of that $13 million will be a pass through that we ultimately pay to our suppliers for gas and for electric and power supply contracts,” he said.

Harley said total expenses are expected to increase about $10 million from last year. The driver of the increase is the cost of gasoline, electricity and other goods and services.

“We have also seen some costs associated with retirement continuing to increase,” Harley said.

The utility projects beginning the year with $36.4 million in cash and equivalents, but expects to see a net decrease in cash and cash equivalents of $14.8 million for a year-end cash total of about $21.6 million.

The utility plans to spend about $19.6 million in capital improvements.

“We are planning to draw down just under $15 million in cash to help supplement paying for some of those projects,” Harley said. “We will draw down a significant amount of cash as these projects unfold.”

Harley said spending on the projects will be done over several fiscal years.

The budget will also include a full-time gas division operator.

“The goal of that position is to move us closer to the national standard of having four people per crew,” Harley said. “We have three crews in that division.”

Harley said the utility learned lessons through COVID and all divisions have been asked to evaluate manpower availability to ensure the utility can withstand a future pandemic.

“There is no new debt incurred in this budget,” Harley said.

DPU’s economic development revolving fund will hold steady at $1.5 million.

The revolving fund sets aside money for incentives for industrial or commercial development in the county or city.

As part of the budget, DPU will transfer $6 million to the city’s general fund budget, leaving the utility about $7.1 million in the black for the end of the 2022-2023 fiscal year, according to budget proposals.

In addition to approving DPU’s 2022-2023 fiscal year budget, council gave unanimous first reading to changes to the 2021-2022 DPU budget.

The utility’s revenues exceeded its expenses for the current fiscal year by $9.95 million, though the numbers could change before third and final reading.

After a $7.2 million transfer from the utility to the city’s general fund budget, the utility will see a profit of about $2.3 million for the current fiscal year.

In other matters:

• Council unanimously passed a resolution to enter into a three-year contract with Raleigh, N.C.-based ElectriCities of North Carolina, Inc.

Under the agreement, the company will provide DPU lineworkers and substation technicians training on the installation, repair and maintenance of electric systems and substations.

The program will include online training as well as onsite Occupational Safety and Health Administration training in line with OSHA regulations. It will help lineworkers receive their electric journeyman certification that would be registered with the U.S. Department of Labor.

The estimated cost is $16,500 annually for a total cost of $49,500.

• Council unanimously appointed Larry Jackson, Willie Hubbard, Spencer Anderson and Louis Boone to the city’s Building Board of Appeals. The appointments fill four expiring terms. The terms are for four years.

• Council recognized retired DPU employee Harold M. Hughes III for his nearly 39 years of service to the utility. Hughes retired July 18.

Hughes began his employment with DPU in 1983 as a serviceman in the water division. In 1986 he was promoted to crew chief and in 1988 to assistant foreman. In 1990, Hughes was promoted to crew foreman.

In 1999, Hughes was transferred to the Gas Division as the construction and maintenance supervisor.

Council gave him a round of applause for his service.

• Council recognized cheerfulness as the character trait of the month of August. Council encourages city residents to exercise the character trait throughout the month of August.