Itta Bena did the only sensible thing Friday when it voted to accept Entergy Mississippi’s offer to take over the town’s long-beleaguered electricity business.
Residents in the town of 1,800 should keep their fingers crossed that Entergy doesn’t change its mind before the transfer is complete.
Thanks to the brokering of Brandon Presley, the Northern District public service commissioner, Itta Bena has dodged the prospect of being cast into the dark in about a month.
That’s what faced the town had Entergy not stepped into the breach. Itta Bena had lost the patience of its wholesale electricity provider, the Municipal Energy Agency of Mississippi, which wasn’t going to keep carrying a debt for unpaid bills that goes back a couple of decades. The town realistically had no other option than to get out of the power business.
The decision should be good for residents, or at least those who’ve been paying their light bills. (One of the city’s utility problems, according to Mayor J.D. Brasel, is that it has accumulated about $350,000 in bad debt from customer’s unpaid bills, representing about half of what the city owes MEAM.)
Entergy is going to come in, get the records in shape, be sure that all the meters are working and cut off people who don’t pay. It will also start addressing the long-deferred maintenance on the power lines and other parts of the electrical transmission infrastructure.
Best of all, light bills should come down significantly. Entergy’s rates are regulated by the Public Service Commission, and they are presently running 10.5 cents per kilowatt hour. That’s at least 12% less than what Itta Bena has been charging its customers. For some, the reduction might be even more, since a resident’s recent analysis of some customers’ light bills found a still unexplained range of 12 cents to 20 cents per kilowatt hour.
Those in the minority who opposed turning the electrical business over to Entergy are worried about the financial impact the transfer might have on the city’s overall operation.
According to its budget, the city nets about $200,000 a year overall from its water, sewer and electricity services. The budget doesn’t break out the revenue by category, but since the light department accounts for about 80% of the expenses for all utilities, the revenue breakdown should presumably be about the same. That translates into an estimated $160,000 drop in net revenue on electricity, although some of that will be offset by the property taxes and franchise fees Entergy will be paying the city.
Who knows, however, whether the city has been really making as much as its budget projects on the electricity service? Itta Bena hasn’t been audited in several years. Plus the fact that it wasn’t paying MEAM in full for quite some time suggests that most of the benefit the city has been getting from the electricity business have come from sponging off of its biggest creditor.
Itta Bena has had neither the personnel nor the money to run an efficient electrical utility, even a relatively small one. It may be overmatched trying to run a water and sewer district, too.
The complaints about sewage backing up into homes and water standing in yards would suggest that this infrastructure is crumbling as well. If Itta Bena can’t get those problems corrected, it should consider also relinquishing those operations. The East Leflore Water and Sewer District, which handles most of Leflore County outside of Greenwood, would be the logical one to take over those services.
A week ago, I floated the suggestion that Itta Bena think about unincorporating and letting the county take over its affairs. That’s understandably not the most popular suggestion in the world for those in office currently or for others with emotional ties to self-governance.
But the town leaders must also face reality. The population has shrunk by 40% over the past 40 years. The majority of its businesses are gone. If it doesn’t have the tax base any longer to support its operation and pay its bills, it’s got one of two choices: to increase taxes or to become more efficient. If it doesn’t think taxpayers can stand to pay more, or if it feels there are no more efficiencies to squeeze from an already understaffed operation, then it’s time to look at merging with someone bigger who can provide the services at a reasonable cost to constituents.
An important reason to incorporate is if a municipality can provide better services at no more cost than someone else. Once it loses that capacity, whether from mismanagement or from forces outside of its control, it loses a major justification for being a city.
The 4-1 vote to take Entergy’s offer was the smart choice. It may not save the city, but the path it had been on was certainly doomed.
• Contact Tim Kalich at 581-7243 or firstname.lastname@example.org.