City Manager Bill Baker and Keith Skelton, assistant city manager, explained that the Grand River Dam Authority (GRDA) announced last month a 4.5 rate increase.
The city purchases electric power from the GRDA.
Skelton said the recent realignment of electric rates in Sallisaw may be enough to offset the cost, but the GRDA rate increase could skew the realignment again.
City officials last year approved the realignment upon the advice of former city manager, Jim Hudgens. Hudgens said residents were subsidizing the larger electric power users. The rate realignment raised the cost of electricity for many small businesses and some churches where major power use was on Sunday mornings. Most residents' electric rates remained the same or were slightly lower.
Baker said increasing the electric rate to cover the GRDA rate increase would add about 16 cents a month to residents' electric bill and about 0.2 percent, or an average of about $17 a month, to the commercial rate customers bills.
Skelton said the rate hike will add over $200,000 to the city's electric bill. He added, "We could not absorb that cost if we changed the rates. The rate increase offsets the GRDA increase for the vast majority of our customers."
Skelton said that the GRDA rate hike might again skew the electric rates for all customer classes by the end of the year.
Mayor Shannon Vann said he would rather wait until the end of the year "to see what the real impact of the GRDA rate increase is" before passing the cost on to customers.
The city commissioners agreed and voted against the rate increase.
The city commissioners also approved the city's $24.9 million budget. (See accompanying charts)
Baker explained the budget increased about $6 million over the 2003-4 budget due to the bond issue for the city's new fiber-to-the-home project. The project will allow Sallisaw residents to chose local-carrier telephone service, Internet service and cable television service.
After an executive session the city commissioners, acting as the city municipal authority, approved the purchase of about 1,200 acres adjacent to the city landfill, at a cost of $750 per acre.
Vann said the purchase will extend the life of the landfill for up to 100 years.
The commissioners also approved, by a vote of four to one, a $3,000 pay raise for the police chief. Vann voted against the raise. Commissioner Randy Folks said he wanted residents to understand the raise is not for Police Chief Gary Philpot, but for the police chief's post, no matter who holds the post. The increase will go into effect after the next election in April.
The police chief's current salary is $44,652, and will increase to $47,652.
Commissioner Ron Lockhart asked if the city could do anything to assist the Old Sallisaw High School Association after the old high school was destroyed by fire June 9. Baker and City Attorney John Robert Montgomery said the city cannot give the city's, and the people's, money away without receiving something in return. Montgomery said he would search the laws to determine if there is a way to help the association.
Lockhart also asked if the city could help the Sallisaw Youth League, which lost between $25,000 and $30,000 in equipment stored in the old high school. Baker said the city will research supplementing the league through the parks and recreation account.
The commissioners also opened bids for the summer street program, which ranged from $198,288 to $271,680, and bids for the roofing of city hall, which ranged from $39,850 to $49,300. The bids were turned over the staff for review.
