Chickasha Plans To Fund Water Treatment Plant With Sales Tax Increase Or 85% Water Rate Hike

The city of Chickasha said it's in dire need of a new water treatment facility. But residents said they are concerned about how the city plans to pay for it.

The city said there are two options to cover the cost of the new $74 million water treatment facility. The first is to implement a 1.25% sales tax to replace the .75% sales tax that funds capital improvement projects (CIP). The .75% CIP sales tax is set to expire on Dec. 31.

Currently, Chickasha has a combined 9% sales tax (4.5% state tax, .75% Grady County tax, 3.75% city tax). Should the proposed 1.25% sales tax go into effect, a $10 purchase would mean paying 95 cents in sales tax rather than the current 90 cents, the city said. That equates to a five-cent increase in sales tax for every $10 in purchases.

Chickasha residents will vote on the 1.25% sales tax on Aug. 8. If it's approved, it would go into effect on Jan. 1, 2024. The sales tax is expected to generate about $4.67 million in revenue annually, the city said. It would fund not just the construction of the water treatment plant, but other capital improvement projects as well, the city added.

If the sales tax does not pass, the city said it would automatically raise water rates by about 82% starting Oct. 1 to pay off a loan required for the new water treatment facility. This means that a resident who pays $34 per month for using 5,000 gallons of water would pay $61.87 per month.

"That was ridiculous," said Chickasha resident Katharine Miller, who said she pays more than $60 per month for her water after the city increased her rate by $20 last fall. "Everybody's going to be paying what - 100 bucks or 80 bucks, 90 bucks? That's a really kick in the rear."

But Chickasha City Manager Keith Johnson said there are few other options, given that the city's current water treatment facility was built in the 1950s and is operating past its useful life.

"We are at risk of not being able to provide water to the city," said Johnson. "It's either do nothing or do something, and the something we have to do is going to cost us money."

Johnson said the 1.25% sales tax would be the more affordable option for Chickasha residents.

"Sales taxes are paid not only by the citizens of this community, but by anybody who shops or spends money on a retail level here in the city of Chickasha," said Johnson. "And so it spreads the cost of that improvement among a larger group."

But Miller said she's not happy with either option.

"I'm a home health nurse and it's hard on these little people that have a set rate," said Miller. "And now, they want to raise our bill more?"

Johnson said the new water treatment facility is likely a three-year project, which includes both the design and construction phases. He said it will be built next to the current plant. Johnson said water quality should improve once the new facility is operational.

Water quality has been a concern for many Chickasha residents, including Miller, who said the water is often discolored and has an odor.

Chickasha officials will host four town hall meetings regarding the upcoming 1.25% sales tax vote. Click here for the dates and more information.