Mentone Gets Bad News About Sewer Costs
July 28, 2016 at 4:25 p.m.
Mentone Gets Bad News About Sewer Costs
By David [email protected]
Eric Walsh, of Umbaugh & Associates, gave the board a financial update for the town's sewage works project.
Efforts to build a new sewage works began in late 2007. Bids for the project were received in May. When the bonds are issued on the open market, financial reports have to be provided that are no more than three months old, Walsh said.
The total estimated project cost is $1,655,000, with about $600,000 coming from an Office of Community and Rural Affairs grant.
Over the past three years, Mentone's cash position has decreased from more than $100,000, Walsh said. On Dec. 31, 2007, the fund balance totaled $195,097; totaled $215,694 on Dec. 31, 2008; $165,082 on Dec. 31, 2009; and $100,825 on April 30.
Walsh reported the municipal sewage works collections declined by about $8,000 from $110,346 in 2007 to the 12 months ended April 30 at $102,379. During that same time period, total operating disbursements remained pretty constant, Walsh said, which is a good thing.
Like everyone else across the state, he said, the town's interest income is minimal. In 2007, it was $5,339, but $1,276 ending April 30.
In cash and cash equivalents, Walsh reported the town's municipal sewage works is $70,707 in the red as of April 30. Most of that is project-related costs, he said. Take that away, and the town's municipal sewage works is basically "treading water."
In April, the town board enacted new sewer rate increases to help pay for the new sewage works plant. That should help increase revenue to approximately $183,393.
The $1.655 million project cost includes $118,060 in contingency costs. If not all of that is used, the town could use it to pay toward the bond issue. Walsh said they are expecting to sell bonds June 22, and then the bond interest will be finalized.
To pay for the project, the town is looking at an annual outlay of $84,726.88. Even with the new rates put into place, that won't be sufficient to cover the costs.
The current monthly bill for a customer who uses 4,000 gallons a month is $28.17, according to Clerk-Treasurer Barb Ross. With phase II rate going into effect Jan. 1, the rate will increase another $16.73 to $44.90 for a monthly bill of 4,000 gallons.
Walsh provided a comparison between Mentone's municipal sewage works rate and surrounding communities. The town of Bremen was the lowest at $15.11, with Etna Green's being the highest at $53.85, according to Walsh's figures. Mentone's present rate of $28.17 is between Rochester's at $24.39 and Bourbon's at $31.10. After the phase II rate increases, Mentone's rate will sit between Culver's at $38.90 and Fulton's at $45.
Walsh said the biggest difference in revenue for the sewage works now and two years ago is the number of vacant properties in Mentone. As Mentone has about 400 customers, it has close to 50 vacant properties.
The town board introduced the new sewer rates ordinance. A public hearing on the new sewer rates will be June 21 at 6:30 p.m. in the Mentone Community Emergency Services Building.
Mike Strang, of the Bonar Group, gave a quick timeline of the sewer works project.
In May, the town received bids from five different contractors, and the town board accepted those bids at a special meeting. One bidder, G&O, was too low at $807,600 and opted out of the project.
The next lowest bidder was RE Crosby at $1,124,199. Strang said he sent a letter to the town board recommending RE Crosby as the contractor for the project. The town was hoping the project bids would come 15 to 20 percent less under the engineer's estimated cost, but they did not.
The town board can't award the project, however, until the funds from OCRA are received at the end of June or early July. Strang said the town board could award RE Crosby the contract at its July meeting, which is set for July 6 at 6:30 p.m.
Strang said they only have two permits left to get, one for the Indiana Department of Environmental Management and the other is a building permit. The building permit is predicated on the IDEM permit, Strang said. The building permit will be sought in the name of the town, but once the project bid is awarded, it will be transferred over to the contractor.
The Indiana Department of Transportation permit already has been acquired and all the easements have been received, Strang said.
"We're just waiting on the state to review the plans for the IDEM permit," Strang said.
He then presented a second amendment to the original contract between the town and the Bonar Group to provide inspections and oversight on the sewage works project at an hourly cost. The amount can not exceed $65,000. Strang said Bonar Group would work very closely with Utilities Superintendent Eric Carlin to monitor what's going on with the project.
The amendment was approved.
The board also agreed to have its annual budget meeting July 6 after its regular board meeting.[[In-content Ad]]
Eric Walsh, of Umbaugh & Associates, gave the board a financial update for the town's sewage works project.
Efforts to build a new sewage works began in late 2007. Bids for the project were received in May. When the bonds are issued on the open market, financial reports have to be provided that are no more than three months old, Walsh said.
The total estimated project cost is $1,655,000, with about $600,000 coming from an Office of Community and Rural Affairs grant.
Over the past three years, Mentone's cash position has decreased from more than $100,000, Walsh said. On Dec. 31, 2007, the fund balance totaled $195,097; totaled $215,694 on Dec. 31, 2008; $165,082 on Dec. 31, 2009; and $100,825 on April 30.
Walsh reported the municipal sewage works collections declined by about $8,000 from $110,346 in 2007 to the 12 months ended April 30 at $102,379. During that same time period, total operating disbursements remained pretty constant, Walsh said, which is a good thing.
Like everyone else across the state, he said, the town's interest income is minimal. In 2007, it was $5,339, but $1,276 ending April 30.
In cash and cash equivalents, Walsh reported the town's municipal sewage works is $70,707 in the red as of April 30. Most of that is project-related costs, he said. Take that away, and the town's municipal sewage works is basically "treading water."
In April, the town board enacted new sewer rate increases to help pay for the new sewage works plant. That should help increase revenue to approximately $183,393.
The $1.655 million project cost includes $118,060 in contingency costs. If not all of that is used, the town could use it to pay toward the bond issue. Walsh said they are expecting to sell bonds June 22, and then the bond interest will be finalized.
To pay for the project, the town is looking at an annual outlay of $84,726.88. Even with the new rates put into place, that won't be sufficient to cover the costs.
The current monthly bill for a customer who uses 4,000 gallons a month is $28.17, according to Clerk-Treasurer Barb Ross. With phase II rate going into effect Jan. 1, the rate will increase another $16.73 to $44.90 for a monthly bill of 4,000 gallons.
Walsh provided a comparison between Mentone's municipal sewage works rate and surrounding communities. The town of Bremen was the lowest at $15.11, with Etna Green's being the highest at $53.85, according to Walsh's figures. Mentone's present rate of $28.17 is between Rochester's at $24.39 and Bourbon's at $31.10. After the phase II rate increases, Mentone's rate will sit between Culver's at $38.90 and Fulton's at $45.
Walsh said the biggest difference in revenue for the sewage works now and two years ago is the number of vacant properties in Mentone. As Mentone has about 400 customers, it has close to 50 vacant properties.
The town board introduced the new sewer rates ordinance. A public hearing on the new sewer rates will be June 21 at 6:30 p.m. in the Mentone Community Emergency Services Building.
Mike Strang, of the Bonar Group, gave a quick timeline of the sewer works project.
In May, the town received bids from five different contractors, and the town board accepted those bids at a special meeting. One bidder, G&O, was too low at $807,600 and opted out of the project.
The next lowest bidder was RE Crosby at $1,124,199. Strang said he sent a letter to the town board recommending RE Crosby as the contractor for the project. The town was hoping the project bids would come 15 to 20 percent less under the engineer's estimated cost, but they did not.
The town board can't award the project, however, until the funds from OCRA are received at the end of June or early July. Strang said the town board could award RE Crosby the contract at its July meeting, which is set for July 6 at 6:30 p.m.
Strang said they only have two permits left to get, one for the Indiana Department of Environmental Management and the other is a building permit. The building permit is predicated on the IDEM permit, Strang said. The building permit will be sought in the name of the town, but once the project bid is awarded, it will be transferred over to the contractor.
The Indiana Department of Transportation permit already has been acquired and all the easements have been received, Strang said.
"We're just waiting on the state to review the plans for the IDEM permit," Strang said.
He then presented a second amendment to the original contract between the town and the Bonar Group to provide inspections and oversight on the sewage works project at an hourly cost. The amount can not exceed $65,000. Strang said Bonar Group would work very closely with Utilities Superintendent Eric Carlin to monitor what's going on with the project.
The amendment was approved.
The board also agreed to have its annual budget meeting July 6 after its regular board meeting.[[In-content Ad]]
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