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Utilities rate increase not expected in Starkville


Terry Kemp

Terry Kemp



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PDF file File: Starkville CAP loan agenda item

Carl Smith



Starkville Utilities General Manager Terry Kemp says he has no intention of calling for water and sewer rate increases as the city attempts to borrow $1 million for infrastructure improvements through the Mississippi Development Authority's Capital Improvements Revolving (CAP) Loan Program.  


Aldermen voted 5-1 Tuesday to authorize Golden Triangle Planning and Development District Project Analyst Phylis Benson to move forward with the state application. 


A public hearing on the loan, which Benson said would be at a 2 percent interest rate with payments spread across 20 years, is expected to be held in late February. The application itself would then be sent to Jackson for review. 


Specifically, the loan will help fund previously identified water and sewer projects -- including fire protection for the Roundhouse Road area, Environmental Protection Agency sewer line replacements and pump station rehabilitations -- and other fixes deemed necessary. 


Roundhouse Road improvements are estimated at $233,685, while sewer line replacements should cost approximately $265,562.  


Twelve pumping stations -- Deerfield, Locksley Way, Sherwood Nos. 1-4, Greenbriar Nos. 1 and 2, Country Club, Crossgates, Louisville and Dan Camp -- are scheduled for rehabilitation projects, each ranging in cost from $15,000 to $45,000. The entire project, including contingencies, is expected to cost $426,000. 


"It provides a much easier option from a business case than actually trying to raise funds with rates," Kemp said of the CAP loan program and its low interest rate. "These pumping stations will continue to be used for a long time. It's best to spread it out as long as you can over the life of a project to allow everyone that benefits to pay their share." 


Ward 6 Alderman Roy A. Perkins, the lone vote against Tuesday's action, pushed Kemp to commit against raising rates for debt service associated with the loan. While Kemp said he had no intentions of pursuing a rate increase, he did not explicitly say no because of the inability to predict the future. 


Mayor Parker Wiseman assisted Kemp, saying the city would not be pursuing the $1 million loan if its fund balance wasn't strong enough to handle the move. 


Perkins said he would potentially support a scaled-down, conservative loan, but the $1 million request was "too big of a leap" to earn his support. He also referenced his fellow board members' prior commitments to large-scale projects -- Starkville Police Department renovations, a new industrial park and others -- and the board's combined 5.58-mill tax increase this term. 


"I know the need is there. We have roads, drainage and other capital improvements that we have to wait on the resources to come available. This is a very strenuous request, in my opinion," he said. "With all due respect to you, Mr. Kemp, I did not get a commitment from you definitively that there would be no rate increase. Conservatively, I do not want to vote for anything at this point that would be a further tax increase. The citizens are burdened enough. Sometimes there are things I want to do ... but I have to realize I have to look at the resources and prioritize and budget based upon funding availability." 


In other business, aldermen unanimously approved a temporary moratorium on new billboards. 


The moratorium, brought forward by Ward 3 Alderman David Little, means Starkville shall not accept, review or approve any applications for new billboards 30 days after its passage through June 30 -- the last day of the current administration's term. 


Pending applications or those previously approved by the city are not affected by the temporary ban.


Carl Smith covers Starkville and Oktibbeha County for The Dispatch. Follow him on Twitter @StarkDispatch



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