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July 9, 2014

Norman City Council proposing revenue bond to pay for $31M water treatment project

NORMAN — Norman’s water rates are among the lowest in the region.

While residents might think that’s a good thing, Norman’s aging water infrastructure and new regulations by the Department of Environmental Quality are among the factors driving what city leaders say is a long overdue, $31 million upgrade of the water treatment facilities.

New city council members Jerry Lang and Clint Williams were updated on the proposed upgrade at a council conference session Tuesday night. The city will have to float a revenue bond to pay for the project.

Unfortunately, the water treatment plant is not a good business model in that the city enterprise fund does not generate enough money to cover the cost of upgrades and maintenance into the future.

A comparison of residential water monthly charges shows that Norman ranks well below Midwest City, Moore, Edmond, Enid, Oklahoma City, Lawton, Bartlesville, Ardmore, Ponca City, Stillwater, Broken Arrow and Tulsa, as well as Texas cities Denton and Lubbock, and a similar college town, Lawrence, Kan.

One reason Norman’s water rates have remained so low is because a clause in the city charter requires voter approval for any increase in city utility charges. While the Charter Commission suggested allowing voters to consider removing this clause that some say is outdated, the Norman City Council declined to put such a charter amendment on the ballot.

What city leaders will have to put on a ballot in the near future, however, is a water rate increase. The increase, if approved by voters, would create the revenue needed to pay off the loan needed to complete the water treatment plant upgrades.

Revenue bonds do not require a vote of approval by the public. However, revenue bonds require a revenue stream large enough to support the request for the loan from banks.

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