Newcastle — The City Council voted on Nov. 10 to adopt a four-tier volumetric water rate structure and to mirror future Oklahoma City wholesale increases so Newcastle’s charges track the city’s rising purchase costs.

City Manager Kevin (speaking as the presenter) told the council the reservation-commodity contract with Oklahoma City requires Newcastle to pay a reservation charge — a fixed daily amount — whether the water is used. He said the reservation is currently 2,048,000 gallons per day and Oklahoma City’s commodity rate was $3.28 per 1,000 gallons after recent adjustments. Kevin warned that, with the manufacturer-scheduled increases through 2028, Newcastle’s monthly wholesale bill could rise roughly $50,000 from current levels under steady usage, creating a substantial budget pressure.

“On September 25, this was our water bill from Oklahoma City: $233,934,” Kevin said, explaining the example the city used to model the impact. He said that same usage at the new Oklahoma City rates would add roughly $21,000 to one monthly bill and that the city may need to budget more than $3 million for wholesale water in 2028 compared with about $2.2–$2.4 million today.

The adopted plan keeps the base meter charge unchanged for low-volume users — $34 covers the first 2,000 gallons — and restructures the per‑1,000‑gallon charges into four volumetric steps so very large users pay a greater share. Under the proposal the council approved, the immediate pass-through covers part of recent increases (a $0.50 per 1,000‑gallon adjustment) and the ordinance is drafted to apply Oklahoma City’s scheduled November increases to Newcastle’s rates the following January so the city would not need to take action each year to cover wholesale changes.

Council members pressed for protections for moderate- and low-income households. Kevin supplied data showing that users who consume 2,000 gallons or less make up a small percentage of accounts (estimates ranged from ~5–8 percent depending on the month), which helped shape the council’s decision to keep the base charge and first tier intact.

Councilmember discussion focused on three options: (1) immediate single increases, (2) an ordinance that automatically mirrors Oklahoma City’s increases (the option the council approved), and (3) waiting for a new five-year rate study in 2027. Several council members said mirroring Oklahoma City would reduce the administrative lag that previously left Newcastle absorbing wholesale increases for several months.

The motion to adopt the city manager’s four-tier residential/commercial rate proposal and to implement mirroring of Oklahoma City’s relevant November increases was moved, seconded and passed by roll-call vote. The council instructed staff to provide revenue modeling that shows the projected impact of the new structure on the utility’s revenues and on customer bills ahead of the next budget cycle.

Next steps: The council directed staff to finalize ordinance language to enact the mirroring mechanism and to bring detailed revenue models and bill-impact tables to the next budget workshop.