Woodward, Okla. — FORT SUPPLY -- The Town of Fort Supply continues to take strides toward climbing out of its recent financial mire.

That includes action taken by the Town Board of Trustees during their regular meeting Tuesday night to approve a $74,400 estimate of needs budget for Fiscal Year 2012-2013.

This "estimate of needs" doesn't reflect all the revenue and spending of the town, since it doesn't include appropriations for the town's public utilities.  Instead it outlines a budget only for the municipality's general fund and sinking fund.

The following is the breakdown for Fort Supply's FY2012 estimate of needs:

General Fund - $74,400

• Personal services - $34,000

• Maintenance and operation - $40,150

• Capitol outlay - $250

Sinking Fund - $0

The town's accountant Meredith Meacham Wilson said she believes the estimate of needs provides "something realistic and attainable" as far as an outline for town spending this year.

"It's not perfect, but it's a good starting point," Wilson said to the town trustees.

In addition, she reminded them that "the budget is always amendable."

For example, in getting the FY2012 budget to balance, Wilson had to make certain expense cuts, such as reducing the approximately $6,000 that the town spent on 3 loads of asphalt for street overlay projects in 2011-12 to a budget of just $250 for 2012-13.

However, since the budget is set "conservatively," she said if the revenue from the town's utilities exceed the budgeted goals, then there will be extra money that could be appropriated for additional street overlay funds.  Or the extra revenue could go toward another expense.

On a positive note, Wilson told trustees, "already you can see we're meeting our goals."

She was referencing an approximately $58,000 profit for the month of July in the city's Public Works Authority account for utility billing.

"You've made some money," she said.

The increase comes from increased electricity and water use because of the higher summer temperatures, she said.

But the problem is that profit is based on the amounts that have been billed out for utility services and doesn't necessarily reflect what's been collected so far, Wilson said.

"We need more cash," she said, noting that the town still has almost $110,000 in outstanding vendor payables.

"That includes things that were not incurred this month because obviously there's been a gathering of debt," she said.  "But I'm not going to harp on the negative; it is what it is."

Wilson said the town is continuing to pay down those bills and make progress on that debt.  She said recent payments have brought the town "up-to-date with Western Farmers," the town's electricity supplier, and only "one month behind on City of Woodward," which supplies the town's water.

Going forward, Wilson said the town could see greater progress in these areas if trustees were to approve utility rate increases.



REPORT FROM MESO REPRESENTATIVE

Wilson was not alone in recommending rate increases as Shane Woolbright, with the Municipal Electric Systems of Oklahoma (MESO), also spoke to the trustees about making some changes in the town's electrical service.  MESO is an association of cities who own their electric utility services.

Woolbright said the town could see a real increase in electric revenue if they work to bring the rates the town is paying and the rates the town is charging citizens closer into line with other communities across the state.

For example, Woolbright said, "this past month you were buying power at an average rate of 6.5 cents a kilowatt-hour."

He said that "is higher than what other cities are being charged."

That is without taking into account the 5 to 6 percent loss in energy due to resistance in transferring the electricity, plus the amount of electricity the town uses in its governmental operations, which he said makes the more accurate figure for the town's electricity cost even higher at 7.15 cents per kilowatt-hour.

Beyond paying more than other cities to get its power, Fort Supply is also not charging as much as other cities to provide that power to its citizens, Woolbright said.

"You were selling it to your citizens for 7.5 cents per kilowatt-hour, so you didn't really have any mark-up," Woolbright said, noting "many cities typically sell at 9.5 to 10.5 cents (per kilowatt-hour) in the summer."

Plus where many rural electric co-ops throughout the state charge a base rate of around $15 for electrical service, Woolbright said the town of Fort Supply is only charging a $6.50 base rate, which includes "$2 worth of energy to go with it, so your base rate is really only $4.50."

To remedy this disparity between what Fort Supply charges and what other Oklahoma communities charge, the MESO representative said, "I suggest you make an interim change in the way you bill your power and take it through to fall of 2013."

As part of his recommendation, Woolbright said he would not only encourage the town to raise its kilowatt-hour rate, but also increase the base rate to $12.50 for the first 20 kilowatt hours.

"I suggest you put these new rates into effect and do it now in time for it to take effect for the billing that goes out in September, because you're going to see the biggest electricity use this month," he said, as more usage means a bigger opportunity for increased revenue.

However, the town trustees wanted to get a little more information about how the rate increases would impact the bills for individual customers before taking any action on the suggested increases.

But taking to heart Woolbright's suggestion that the rates be adjusted soon to take advantage of the increased electricity usage in August, Mayor Mike Lowden said the board should consider scheduling a special meeting within the next week or so to reconsider setting rate increases.

In the near future, Woolbright suggested the town also shop around and talk with different electricity providers to potentially secure a lower purchase rate for the town, which would generate some cost savings.