It’s Your Money: City seeks consultant to study utility rates

Updated: Oct. 15, 2019 at 6:31 PM EDT
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MYRTLE BEACH, S.C. (WMBF) - Myrtle Beach is spending money to determine if it is charging the necessary rates needed to operate water and sewer services along with stormwater operations.

This week the city will begin to review proposals from potential consultants to complete a study into the two city-wide fees.

“It is time for a rate study so we understand, well these are our expenses and these are the rates we are charging now. Will these rates cover the expense that we need to spend on this utility,” city spokesperson Mark Kruea explained.

As the city plans for the next five years, it needs to be assured that the rates will cover services and capital projects.

Water and sewer rates are completed every five years but this will be the first time stormwater fees will be studied.

The Request for Proposals (RFP) asks the consultants to establish recommendations for five years worth of rates.

The rate study for stormwater fees was budgeted at $50,000 in the 2020 budget. No cost was listed for the water and sewer fee study.

“We probably could do the work in-house but we don’t have someone with the time set aside to do that laborious math project. Our staff is doing other things, this isn’t a full-time position for us so it makes sense to hire a consultant who’s got that expertise, who can devote a chunk of time to it and produce a result,” Kruea explained.

Both fees have increased in the past. This year water and sewer rates increased by around $3 a month and in 2018 stormwater fees increased by $6 a year.

Despite the increases over the years, the city ranks low for utility costs compared to other nearby cities, according to Myrtle Beach budget documents.

Kruea said one of the reasons the studies are needed is to keep up with an increasing population.

“As there are more people added to the area there are more utility accounts but you also need to factor in the replacement of water and sewer lines and maintenance of stormwater utilities for example and then the service to the new customers," he explained.

Although the city is reviewing what rate is appropriate to charge, Kruea said it is unlikely rates will go down.

“It’s probably unlikely rates would go down given the rates we’ve experienced. Plus for water and sewer, we buy it wholesale, buy that service wholesale from Grand Strand Water and Sewer Authority so when they raise rates we pass that cost along to our customers,” Kruea said.

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