Oxford Utilities Proposes $25.5M Budget for Fiscal Year 2025

Board of Aldermen Reviews Budget Proposal

The Oxford Board of Aldermen recently reviewed a budget proposal brought forth by Oxford Utilities. The budget proposal, coming to a total of $25.5 million, was presented by OU-ED General Manager Rob Neely. A final decision from the Board on this budget proposal is set to occur next week during their regular meeting.

The financial year for Oxford Utilities spans from July 1 to June 30, facilitating a separate approval process by the Board prior to approvals of remaining city budgets. Notably, the fiscal year for other city departments runs from October 1 through September 30.

Department Heads and Mayor’s Office Begin Budgeting Process

Currently, department heads alongside the Mayor’s office have initiated the budgeting process for the Fiscal Year 2024-25. Within the proposed budget, Oxford Utilities expects total expenditures of $25,508,787, offset by projected revenues amounting to $25,776,221.

Budget Highlights and Key Details

The largest expense for the electric department comes from purchased power from the Tennessee Valley Authority. Roughly $20 million, accounting for more than 76% of OU-ED’s revenues, is allocated towards payment for energy from TVA.

Compared to the Fiscal Year 2024, total operating expenses are forecasted to increase by 15%, while revenues are likely to witness a marginal decline of 1.7%. The increment in expenses is primarily attributed to inflationary pressures on materials, supplies, and employee benefits, coupled with a recent surge in tax payments.

Perspective from OU-ED General Manager

Rob Neely, the OU-ED General Manager, conveyed to the board that the rise in expenses will limit the funds available for capital projects in FY2025. Nevertheless, OU will not seek any local rate increase for FY2025, with changes potentially contemplated in the years to come.

In October 2023, TVA concluded the Pandemic Relief Credit which indirectly increased power costs for Oxford Utilities, restoring the base rate to pre-pandemic levels. Unlike some utilities, this increase was absorbed and not transferred to the customers.

Looking Toward Future needs

Rising operational and maintenance costs for the electric system may necessitate a local rate increase in succeeding years, to keep abreast with inflationary increments.

Oxford Utilities Service Reach

As of March 31, Oxford Utilities delivers electric services to 10,329 electric customers through three substations and over 100 miles of primary electric line. Moreover, the company serves 14,864 water customers, 13,031 sewer customers, and provides billing and customer services to 14,487 sanitation customers.