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Rate hikes for utilities back on City Council agenda

Utility bills for residential customers could go up if the Memphis City Council approves an increase rate proposal presented by the Memphis Light, Gas and Water Division on Tuesday.

In the executive session committee meeting, MLGW leaders laid out details of a plan that include a $14 a month hike for residents, to be phased in within the next three years. The additional funds would be used to complete an overhaul of the electric, water and gas infrastructure.

If the proposal is approved, electric rates would go up 4.2 percent in July 2020 and then 1.5 percent in January 2021 and again in 2022. Water rates would go up 15 percent in July 2020 and an additional 7 percent in January 2021 and 5 percent in January 2022. Gas rates would also increase by 2 percent, effective January 2022.

According to MLGW President and CEO J.T. Young, customers would eventually see an increase of approximately $9 a month more for electric, $4.33 a month for water and 74 cents a month for gas.

Young pointed out that the funds will help reduce the time residents spend without power. He told council members that 62 percent of residents said on a recent survey that they would be willing to accept a small rate increase for better services.

This isn’t the first time MLGW has asked the council to approve an increase. Within the last two years, leaders have proposed rate hikes that have been rejected by the council. Some member said the original hikes were too much for residents already struggling in Memphis.

“We wanted all of our customers — or as many as we could — to be educated about the concerns and the problems that we’re having and what’s needed to improve that,” Communications Director Gale Jones Carson told council members.

To save money, MLGW officials have also discussed the possibility of cutting jobs. During a utility board meeting last month, representatives from Baker Tilly, a consulting firm, suggested MLGW cut 300 to 400 positions over the next 12 to 19 months. The consultant also proposed closing three of the five community offices.

Young said MLGW would plan to eliminate the jobs through attrition instead of layoffs. He acknowledged that it won’t be an easy feat.

“We know it’s going to be a challenge. We know it’s going to be difficult,” he said.

While there was no direct opposition to the plan, council members had questions about portions of it.

Councilman Martavius Jones examined the consultant’s suggestion to do away with programs that would ultimately affect the company’s spending with women and minority-owned businesses.

“I would not be in support at all,” Jones said of the recommendation, “if it’s not talking about broadening or increasing our spend.”

Young said the consultant’s plan wasn’t about targeting a particular group or program and was focused on saving the company money.

Council members are tentatively scheduled to vote on the proposal during the next council meeting.

The Council did move the needle on a different hike with the approval on the first of three readings of an increase in the city’s solid waste fee.

The fee of $22.80 on monthly utility bills would go to $32.15 in January under the proposal by the administration of Mayor Jim Strickland.

In other business

Also, during an executive session meeting, the council had a heated debate about the recruitment of police and fire departments to hire employees who live outside of Shelby County.

A referendum ordinance to change the policy that will allow the departments to recruit people who live at least two hours away is currently on the books for a vote.

Memphis Police Director Michael Rallings said changing the policy is in the best interest of the city in order to obtain more police officers; but some council members questioned the department’s recruitment efforts.

“You are not selling Memphis the way it should be sold,” Councilman Joe Brown said. “That’s why we’re not able to recruit officers.”

Council members will resume discussions on the topic at the Nov. 19 meeting.

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