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City's utility rates could rise $300 a year

Staff writer

The city council will vote on increasing utility rates by more than $25 a month and $300 a year for the average Marion household at its Dec. 22 meeting.

City council members will vote on a measure raising the residential base electrical rate by $4 to $12 and the commercial base rate to $14, plus a 1.6-cent increase per kilowatt-hour.

The base water rate would rise $4 to $30 for the first thousand gallons and increase $1.25 to $5 for subsequent thousand gallons.

Council member Melissa Mermis questioned the distribution of tax burden between residences and businesses.

“It appears like the residential are the ones that are footing most of the (bill),” Mermis said.

Holter said that traditionally the Marion city council has been reluctant to target businesses with higher utility fees and rates, believing that shifting more of the tax burden onto existing businesses at some point stifles new business coming to town.

City council members declined to increase the refuse and sewer portions of the utility bill, but the increased electrical rate will account for most of the utility hike.

The base wholesale price of electricity the city purchases is going up 13.95 percent.

City administrator Roger Holter said the city’s electrical rates must increase to upgrade the 2,400-volt system, the lowest level of transmission power.

“Infrastructure improvements have basically been put on hold,” Holter said.

The average five-person household should expect to see their electric charge increase by $22.50 a month, according to city projections. A three-person household should expect their bill to increase $17.60. An average single person will see his or her bill go up by $7.20.

“There were years where we operated our utilities where they produced revenue, and the other years where we actually paid for continuing operations through our cash reserves,” Holter said.

Last modified Dec. 11, 2014

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