Niles approves three-year utility rate increases

NILES — The Niles City Council moved 6-1 to approve three-year rate adjustments for the city’s electric, water and sewage customers during its meeting Monday.

Utility Financial Solutions, LLC completed the city’s Financial Projection and Rate Track in January. The report contains recommended rate tracks to keep the utilities healthy, generate sufficient operating income, account for debt service, and to prevent further deterioration of infrastructure through capital improvements.

Without rate adjustments, the Electric Division Financial Statement projection indicated diminishing operating income and below targets in minimum cash, the Water Division Financial Statement projection indicated significant declines in operating income and minimum cash and the Wastewater Division Financial Statement projection indicated declining operating income and minimum cash balances.

To increase revenues and stabilize finances, the city moved to implement three-year rate adjustments for its utility customers:

Electric – 2 percent increases in fiscal years 2025, 2026 and 2027 with no planned increases to the monthly customer charge. All the adjustment amounts were added to energy (and capacity) usage.

Water – 3.9 percent increases in fiscal years 2025, 2026 and 2027 with no planned increases to the monthly customer charge until 2027 as most of the adjustment amounts were added to the commodity charge.

Sewer – 2.5 percent increases in fiscal years 2026 and 2027 with no planned increases to the monthly customer charge through 2027.

“I know it’s sometimes difficult for people to swallow the rate increases,” said Fourth Ward Councilmember John DiCostanzo. “We want to continue to maintain the system and have it as dependable as it has been, even if It means we need to charge appropriate rates.”

Fourth Ward Councilmember Michael Thompson cast the lone dissenting vote. While he partially agreed with DiCostanzo’s statement, he said he believes the city is not going far enough, and recommended that the city sell off some of its “overabundant” parks to offset costs for customers.

“I can’t support this item because the figures are – I hate to say it – too low,” he said. “Inflation costs literally reflect the rate at which things are increasing. Even pretending that the ‘Byzantine’ inflation rates given by the federal government is true and not underreported as in fact, they are, we would have to at the very least increase the fees proportionate to that inflation. If we simply want to maintain, anything less will be degrading, anything more would be improving, presuming the funds were being spent wisely.

“A better solution would be to have these proportioned figures increased to reflect actual inflation,” Thompson continued. “We could help reduce the burnautical citizens by reducing or eliminating non-essential city activities. Selling off many of the overabundant city parks comes to mind and lowering taxes accordingly.”

Thompson added that he believes the city’s utilities department should be “spun off” into its own entity.

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