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Home News Lawton

Lawton City Council: No utility rate hike

The Chronicle News by The Chronicle News
April 19, 2023
in Lawton
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Lawton City Council: No utility rate hike
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City Council members launched their review of next year’s budget Tuesday with good news: it does not include an increase in utility rates.

Finance Director Joe Don Dunham also said that based on current indications, sales tax revenue is expected to increase 4 percent in the 2023-2024 fiscal year, the same percentage officials expect to see when this budget year ends June 30.

Tuesday’s revenue picture was the first of what is expected to be four budget sessions for the full council (a council study committee is supposed to meet with city administrators more often). While the budget is always a moving target, in terms of projecting revenues and estimating expenditures, this year’s work is further complicated by the loss of City Manager Michael Cleghorn, who started the process with his administrative staff in January, before submitting his resignation in early March.

Under the provisions in city charter, the city manager is tasked with creating the budget; the council with approving it. Council members traditionally do that after briefings from city staff on the revenues that will pay for operations in the coming fiscal year, and asking questions about specific expenditures on personnel, materials and activities.

Dunham’s task Tuesday was giving the council an idea of where revenues stand. Dunham said Lawton, like other governmental entities across the nation, are dealing with the effects the COVID-19 pandemic had on the economy.

“We’re not quite out of the woods yet,” he said, explaining the U.S. Department of Commerce has said the nation could be looking at a short recession mid-year.

That means the start would coincide with the start of Lawton’s budget year, he said. The problem is that people’s disposable income is expected to dwindle and that means taking into account the fact people will be spending less. But Dunham said based on trends, he still is comfortable predicting a 4 percent increase in sales tax revenue in the coming fiscal year, which means a little more revenue from one of the General Fund’s primary funding sources and in the revenue stream that finances the 2019 Capital Improvements Program. Part of that is due to economic activity, including plans to build a cobalt refinery in southwest Lawton.

“We expect to see a little sales tax growth there,” Dunham said, explaining workers building the plant will spend money on hotels, groceries and restaurants, and gas.

That sales tax growth is the only major change Dunham expects to see in General Fund revenue.

“Nothing else has changed very much,” he said of General Fund revenue projections.

There is one notable change in the Special Funds category, money that comes from specific activities and allocated to specific spending categories. Hotel-motel tax revenue is projected to increase, due in large part to the council’s decision to begin enforcing that tax on short-term rentals.

Acting City Manager John Ratliff said only 1-2 percent of the short-term rental establishments in Lawton are registered, meaning the city has no way to enforce payment of the hotel-motel tax. Ratliff said city staff is preparing an ordinance that would help the city enforce that tax on all short-term rentals, which will increase revenues.

“We do a really poor job in collecting it,” he said.

The good news — at least for residents — is that this year’s budget isn’t based on an increase in water, sewer and refuse rates, as it has been in past years. Dunham said the $800,000 increase expected in water sales — the largest revenue source in the three utility areas — comes from expected increases in usage.

“There is no rate increase built in,” he said, adding projected increases are based on what city staff already is seeing.

Dunham said based on revenue projections, city administrators expect a budget that may have to rely on some savings to be balanced.

Ratliff said city staff isn’t quite ready to comment on expenditures because administrators still are working to pull data together. That includes a council directive to look at increasing employee pay.

“We’re not quite there yet,” Ratliff said.


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