Iolans likely will be asked to pay a shade more each month in gas meter and usage fees to help replenish a dwindling gas utility fund.
City Council members gave their reluctant endorsement to a recommendation for what would amount to a $2.50 increase in monthly meter fees for residential customers (from $10.50 to $13, plus an additional 75 cents per unit of gas for the first 1,000 units, or cubic square feet. The cost would drop to $5 for every unit after that. The current rate plan costs customers $4 for every unit above 1,000 mcf.
For perspective’s sake, City Administrator Matt Rehder said his last month’s utility bill reported 1,300 units of gas burned.
Under the new rates, he would expect to pay about $10 more per month.
The last time meter fees were raised was in 2002, Rehder noted. The fund had remained remarkably stable for years, but began to dwindle from its peak balance of $1.2 million in 2016 as the city continued to use it to supplement Iola’s general fund, Rehder noted.
That came to a head in 2021, when the city had to withhold much of its planned $600,000 transfer because of insufficient funding. It ended the year with a $55,000 balance after a $150,000 transfer to the general fund.
For reference, $55,000 is roughly equal to seven days of operating expenses.
Rehder stressed the meter fees and base gas charges are not included in gas rates, which are based on the market costs of the gas itself, and instead are used to pay for infrastructure and operation costs.
Councilman Carl Slaugh, who was city administrator in 2016, noted former Council members eschewed meter fee hikes in 2016, after it was recommended by the city’s energy consultant.
“We’ve been on this slide ever since then to a critical stage,” Slaugh said. “We’ve got to do something.”
He noted the gas fund’s situation is not nearly as dire as when the city had to pass repeated water rate hikes to replenish its water fund.
“Even though it’s painful to do it, when you run a business, you’ve got to keep a profit,” Slaugh said. “You’ve got to make a rate increase every once in a while.”
“I do this with such regret,” Councilwoman Kim Peterson said. “Utility bills are high, and taxes are so high.”
Councilman Joel Wicoff agreed, pointing to inflation rates costing Iolans more across the board.
“It’s been a long time since an adjustment was made,” Wicoff said. “Although I personally hate to do this, I don’t see the percentage increase as too extreme. It’s something we’ve got to do so we don’t go broke.”
Wicoff asked if the proposal would be enough to replenish the fund, and if so, how long will it take to refill it.
