As you are probably aware from recent news reports, the Owensboro Public Schools will soon feel the impact of a significant rate increase for electricity used throughout the school district. Last week we were informed by Owensboro Municipal Utilities that the district’s rates would increase sharply because the utility will no longer provide reduced electric rates to non-profit organizations, including schools.
We certainly have appreciated having a “school rate” for more than three decades rather than a “commercial rate” charged to for-profit businesses. We recognize that they have increasing costs and we will have to pay a larger share, but transitioning our schools to a “commercial rate” over a short period of time will be difficult.
OPS is currently paying approximately $349,000 annually for electricity. An initial rate increase will go into effect July 1. Then, additional increases, planned for the next six years, will raise rates for OPS to $1.3 million. An annual increase of about $1 million per year will certainly impact our staffing and programs we offer.
We certainly want to pay our fair share. But, this represents a significant burden to our schools. To take the new electric rate out of our operating funds from this year forward represents a real loss to us in terms of money that we would use to benefit our students.
To compound the matter, the City Commission is planning an occupational tax increase that is part of the overall revenue adjustments between the City and OMU. This increase will impact the paychecks of all OPS employees.
I wanted to make everyone in our school district community aware of this, but I do not want to create undue alarm. Our board and leadership do not plan to immediately cut $1 million out of our budget. We will make the necessary adjustments over time, but will need to be diligent and disciplined about absorbing the costs of this rate increase. We also plan to implement aggressive plans to become more efficient and conserve power across the district.
We will continue working with the City and OMU to try and find a mutually beneficial solution. We know the status quo will need to change. We will do everything in our power to stand up and support the students and staff of our school district.
I urge anyone in our district community with specific concerns related to this or the occupational tax increase to reach out to members of the Owensboro City Commission. The first reading on this plan will be Tuesday followed by a final vote on March 17 at 5 pm at City Hall.