Oxford Utilities Presents $25.5 Million FY 2025 Budget to Board of Aldermen, Plans to Balance Books Despite Rising Costs

Oxford Utilities Presents Fiscal Year 2025 Budget to Board of Aldermen

Last week, in the bustling city of Oxford, officials took a close look at the proposed budget for Oxford Utilities (OU-ED) amounting to a whopping $25.5 million for the Fiscal Year 2025. The discussion, led by OU-ED General Manager Rob Neely, provided insights into how the utility plans to balance its books for the year ahead.

Budget Review Meeting Highlights

The Oxford Board of Aldermen is scheduled to vote on this proposed budget during their regular meeting next week. It’s important to note that Oxford Utilities follows a fiscal year that runs from July 1 to June 30, separate from the other city departments, which operate on a year that starts on October 1 and ends on September 30.

In the proposed budget for FY 2025, Oxford Utilities projected total spending of $25,508,787, which is expected to be covered by revenues projected at $25,776,221. That sounds like a solid plan, right? However, there’s always a twist! The electric department’s largest expenditure is purchasing power from the Tennessee Valley Authority (TVA), utilizing over 76% of OU-ED’s revenues—roughly $20 million—just to keep the lights on.

Increasing Expenses and Future Rates

This year, total operating expenses are set to increase by about 15% compared to last year. On the flip side, revenues are projected to dip slightly by 1.7%. So, what’s causing all this? The rise in costs can be attributed to inflation impacting materials, supplies, employee benefits, and tax payments. Neely shed light on the fact that these rising costs are likely to impact funds available for capital projects in FY2025, urging the board to understand where the pinch is felt the most.

Here’s some good news: Oxford Utilities won’t be pushing for a local rate increase for this coming year! However, Neely did caution that this situation could change in future years. Why the change? Well, TVA just wrapped up its Pandemic Relief Credit last October, which means energy prices will revert to pre-pandemic levels. Luckily, Oxford Utilities opted not to pass this increase down to customers, in contrast to some other utilities. Still, the continuous rise in maintenance and operational costs might necessitate a local rate increase sooner or later.

Expanding Customer Base

On a brighter note, as of March 31, Oxford Utilities serves a total of 10,329 electric customers, which includes 8,373 residential customers, 1,641 small commercial customers, 231 medium commercials, and even one large commercial customer. The number of electric customers has seen a tiny but significant growth of 1.3% over the past year.

To serve its growing customer base, Oxford Utilities operates three substations and stretches over 100 miles of primary electric lines. The average residential electric usage is noted to be around 966 kWh per month, which is a slight increase of 2% compared to the previous year.

But that’s not all! Oxford Utilities also provides water services to 14,864 customers, sewer services to 13,031 customers, and handles billing and customer service for 14,487 sanitation customers. This performance highlights how vital these utilities are to our delightful city!

Looking Ahead

As the Board of Aldermen prepares for the budget vote next week, the discussions around utility rates and expenses are bound to stay at the forefront. After all, effective management of these funds is essential for ensuring reliable services for all of Oxford’s residents and businesses. Here’s hoping for a successful vote and a bright year ahead for Oxford Utilities!