Monday, 12 men met to discuss a gentleman's agreement made in 1951.
The Pryor Municipal Utility Board made a deal that year with the city of Pryor for MUB to give the city money each year. The agreement, sealed with a handshake, has been upheld through the years.
Though the amount began at roughly 5.5 percent of MUB’s revenue, it has been a flat rate of $550,000 since 2003.
At Monday's regularly scheduled MUB meeting, Mayor Jimmy Tramel requested an increase.
“The charter is very clear, you don't have to do anything, we appreciate what we get now, we really do,” said Tramel. “What I'm requesting is the same funding, less depreciation, that you receive on utility system revenue. It would be about $850,000 per year total.”
The revenue Tramel referenced was a sales tax approved by the citizens of Pryor in 1983. Voters approved earmarking half a cent for the city for street maintenance. The other half-cent would go to MUB for construction and maintenance of the wastewater treatment plant.
“We're asking for something in writing saying we get the same percentage, minus depreciation, that you guys get,” said Tramel, after explaining the policy used in other cities.
The board discussed the funding of Pryor’s Wastewater Treatment Plant saying the money was specifically meant for construction and upkeep. Any excess money, at that point, could be used for utility system improvements only.
“The money out of this sales tax was allocated to fund and maintain that plant, it was a federal mandate,” said Robert Lindsey, MUB member. “We can't change it. We have many projects of our own that need to be done if the community is to continue to have good service.”
MUB General Manager Gary Pruett explained what giving more money to Pryor would mean for utility customers.
“Whatever increase is written off to the council will have to come out in increased fees, meaning a rate increase for MUB customers,” he said.
Conversation shifted to discuss the informality of this type of gentleman's agreement.
“I want to see us come to an agreement in writing. I feel like we need something solid beyond just a gentleman's agreement. It could be just me, but I feel like the $500,000 could be held over our heads,” said city council member Travis Noland.
“I see it as just the opposite, you holding it over our heads,” said Pruett.
Noland said he completely understands that MUB needs money too, but asked the board who benefits from a rate increase and what happens if MUB doesn't have a rate increase.
“It's simple, we cannot give more money without a rate increase,” said Pruett. “We were looking at two decreases coming up, not increases, if this hadn't come up,”
City Councilman Drew Stott asked if MUB has any employee raises scheduled, to which Pruett said he had not even finished work on the budget report, so raises had not been considered. Stott said the city cannot comfortably budget until it knows how much money will come from MUB.
“The first thing we put on our budget is your $550,000, first thing,” said Pruett.
“Says who?” asked Stott.
Pruett said the gentleman's agreement and history are the reasons MUB sets aside the city money first.
The two groups discussed the functionality of a flat rate versus a percentage. MUB said a flat rate is easiest for MUB to budget.
Pruett said the board would not put the $550,000 in writing.
Stott said he does not support a rate increase and does not believe the citizens of Pryor deserve one.
MUB board members reiterated that allocating more money is not possible without a rate increase.
Pruett said MUB is losing customers and if not for providing the city money, the utility could continue roughly five more years without a rate increase. With the existing arrangement, MUB is looking at two or three years until an increase.
“I've been the lone no vote before,” said Stott. “And I can do it again. I'm not for rate increases. It's called living within your means.”
With no decision reached MUB tabled the issue, but discussion continued the following night at Pryor City Council's regular meeting.
The city council agenda listed the item as “requesting a transfer of funds from the Municipal Utility Board to the general fund of the city of Pryor Creek in the amount equal to the sales tax received by MUB on a monthly basis.”
Pruett and Lindsey were present to answer any questions from the council.
Tramel introduced the issue to the council members that were not present the night before by saying he came away from the MUB meeting with the understanding that Pryor would continue to get the $550,000 with no formal agreement.
After more time to think about on the issue, Noland had some questions prepared for Pruett.
“What says that at any point MUB couldn't cut that money?” said Noland.
“Nothing. It's a gentleman's agreement, there's nothing to prevent that,” said Pruett.
“If it was based on a percentage, the funding would decrease if MUB wasn't doing well. Wouldn't that be in the best interest?” said Noland.
“Previous councils wanted a flat fee so they can plan and know what to budget for. MUB has been faithful in this agreement,” said Pruett.
“If it's the first thing you budget, what's the problem with putting it in writing?” said Tramel.
Pruett explained MUB cannot obligate funds past the current fiscal year.
Noland asked what would happen when times got tough, what that would mean for this agreement. As a city, he said, the bottom is to find creative and innovative ways to boost sales tax to prevent that situation from arising.
In returning to the sales tax vote issue, Councilman Leonard Barnes said it cannot be changed unless the citizens vote again and Tramel said he was not trying to change the ordinance.
“No, but you want the money. That's illegal,” said Barnes.
“We're already getting money every year. It's been going as long as I can remember. I have all the confidence in the world in that board,” said Barnes. “I believe they do what's right for our citizens.”
Barnes suggested the council determine what the money was needed for and put it in writing before proceeding.
“They said last night that MUB can't do it without a rate increase and I for one wouldn't want to put that burden on people. We can live within our means,” said Stott.
“We've got the lowest utility rates in northeast Oklahoma. Either way this goes, I'm not for raising rates,” said Barnes.
Noland suggested the council take no action for now, saying he does not believe it’s in a place where it is necessary to pass a rate increase on to the citizens. He told MUB representatives he appreciated the open discussion. Pruett told the council his door is always open, and he's always up for questions.
Pryor was still seeking a written agreement to accompany the $550,000 and MUB could not accommodate that request without a rate increase. Both groups agree it is in the best interest of the community not to make changes that would result in utility rate increases.