LAWTON – The City Council is weighing whether to add 50 cents to local utility bills to help finance upkeep of city vehicles, and has applied for a low-interest state loan to rehabilitate the wastewater treatment plant.
Discussions about the proposed budget for Fiscal Year 2021-22 have included adding a “rolling stock fee” of 50 cents to the utility bill to generate funds for maintaining and replacing city vehicles that have wheels, such as trash collection trucks, police cars and fire trucks.
“This is to ensure we are properly maintaining and caring for equipment to provide vital services to Lawton citizens, as associated costs increase steadily from year to year,” said Tiffany Martinez Vrska, the city’s community relations director.
The fee would generate approximately $168,000 per year, city officials estimate.
In February the City Council, in their role as the Water Authority, agreed to apply to the Oklahoma Water Resources Board for a 30-year low-interest loan of up to $47 million to rehabilitate the sewage treatment plant south of town.
Lawton’s wastewater treatment plant went into service more than 40 years ago, in 1977, records reflect. Because of the facility’s age, “Many key processes have exceeded the design life of the equipment,” Vrska said. The plant has an average treatment capacity of 18 million gallons of wastewater per day, she said.
The OWRB is scheduled to consider Lawton’s WWTP loan application on May 18.
“Once we know when the loan payback will begin, we will know when any potential rate increase is needed,” Vrska said. “The Council and staff are looking at ways to limit any sewer rate increase to the lowest extent possible.
Lawton has four outstanding loans with the Water Board but three of them will be paid off “relatively soon,” Jerri Hargis of the OWRB’s Financial Assistance Division said Tuesday.
Two loans of $1 million-plus were secured in 2002 and another of $1 million-plus was received in 2003, she said.
The balances on those loans are $139,956 (scheduled to be retired in August 2022); $78,461 (scheduled to pay off in August 2022); and $167,948 (to be paid off in August 2023), said Joe Freeman, chief of the Water Board’s Financial Assistance Division.
In addition, the City of Lawton received a $12,705,000 loan from the OWRB in 2018; the balance on that loan is $8,951,276, Hargis said.
The City of Lawton had a debt coverage ratio of 3.02 as of almost two years ago, on June 30, 2019, Crawford & Associates reported in a financial statement analysis. That was its highest level in seven years and meant the City had three times the amount of cash necessary to make its long-term debt payments, the consultants explained.
In Fiscal Year 2019 the City’s non-capital expenditures totaled $109.4 million, of which $20.9 million (19%) were payments for principal and interest on long-term debts.
“This is an indicator of satisfactory solvency and indicates that for every dollar the City spent on non-capital items, 19 cents of that dollar was used for debt service,” Crawford & Associates wrote. In comparison, in FY 2018 the amount devoted to long-term debt payments was 27%; in 2015 it was 33%; and in 2014 it was 42%.