North Webster Hears Wastewater Rate Hike Proposal
July 28, 2016 at 4:25 p.m.
By Jordan Fouts-
Bonnie Mann, a certified public accountant with London Witte Group, gave council the results of a rate study based on the number of users and the cost of wastewater system needs such as operating expenses and improvements. A new rate must be in place by July, council heard, while the cost of wastewater treatment plant upgrades mandated by the Indiana Department of Environmental Management looms over the town.
To help pay for improvements, Mann suggested the town secure a $2 million bond and combine it with an existing $1 million bond, with an annual payment together of $280,000 – about $100,000 higher than the current payment. She said the town would save $150,000 over the 20-year term of the bond by combining them at a lower interest rate.
All equivalent dwelling units inside and outside town currently pay just under $38 a month, she noted. Dividing the proposed annual payment among them would result in an increase to $39 for in-town customers and $41 for those outside town.
She said she calculated a larger increase for out-of-town users, which represent nearly a third of total users, because they cost the town more to service. She added the town may consider a phased-in rate increase, first in July and again after the Knapp Lake Regional Sewer District connects to the town system.
Council discussed whether a rate hike should take into consideration a potential 200 extra customers brought in with that connection – especially since the treatment plant must be upgraded in order to take on the extra load. But Mann noted the rate increase must happen either way.
“In order to get this project going, you need to increase the rate now,” and show lenders the town will be able to repay the bond, she told council. Costs would also be higher the longer they delay, she said.
Council President Jon Sroufe remarked that he’s torn between keeping residents happy and making IDEM happy.
“I don’t want us to be the council who screws this up,” he said. “A couple dollars doesn’t bother me on a sewer bill, I can take that flak. Defaulting on a bond – that bothers me,” though town attorney Jack Birch added that a bond default won’t happen.
The additional revenue from Knapp Lake users can be put toward continuing improvements, Mann said. The Noble County district is also expected to provide a cash bond to help pay for system upgrades.
In addition, the town is pursuing $500,000 in grant money for system upgrades. Council indicated they intend to hire Cornerstone Grants Management Inc. to manage the grant application, and set a public hearing for March 4 at 6 p.m.
Also during the meeting, council passed an ordinance correcting their vacation last month of part of Ward Lane, after resident Jay Rigdon pointed out that a typographical error resulted in vacating more than intended. The error would have barred road access not only for residents but also for town services such as garbage and fire trucks, Rigdon said.[[In-content Ad]]
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Bonnie Mann, a certified public accountant with London Witte Group, gave council the results of a rate study based on the number of users and the cost of wastewater system needs such as operating expenses and improvements. A new rate must be in place by July, council heard, while the cost of wastewater treatment plant upgrades mandated by the Indiana Department of Environmental Management looms over the town.
To help pay for improvements, Mann suggested the town secure a $2 million bond and combine it with an existing $1 million bond, with an annual payment together of $280,000 – about $100,000 higher than the current payment. She said the town would save $150,000 over the 20-year term of the bond by combining them at a lower interest rate.
All equivalent dwelling units inside and outside town currently pay just under $38 a month, she noted. Dividing the proposed annual payment among them would result in an increase to $39 for in-town customers and $41 for those outside town.
She said she calculated a larger increase for out-of-town users, which represent nearly a third of total users, because they cost the town more to service. She added the town may consider a phased-in rate increase, first in July and again after the Knapp Lake Regional Sewer District connects to the town system.
Council discussed whether a rate hike should take into consideration a potential 200 extra customers brought in with that connection – especially since the treatment plant must be upgraded in order to take on the extra load. But Mann noted the rate increase must happen either way.
“In order to get this project going, you need to increase the rate now,” and show lenders the town will be able to repay the bond, she told council. Costs would also be higher the longer they delay, she said.
Council President Jon Sroufe remarked that he’s torn between keeping residents happy and making IDEM happy.
“I don’t want us to be the council who screws this up,” he said. “A couple dollars doesn’t bother me on a sewer bill, I can take that flak. Defaulting on a bond – that bothers me,” though town attorney Jack Birch added that a bond default won’t happen.
The additional revenue from Knapp Lake users can be put toward continuing improvements, Mann said. The Noble County district is also expected to provide a cash bond to help pay for system upgrades.
In addition, the town is pursuing $500,000 in grant money for system upgrades. Council indicated they intend to hire Cornerstone Grants Management Inc. to manage the grant application, and set a public hearing for March 4 at 6 p.m.
Also during the meeting, council passed an ordinance correcting their vacation last month of part of Ward Lane, after resident Jay Rigdon pointed out that a typographical error resulted in vacating more than intended. The error would have barred road access not only for residents but also for town services such as garbage and fire trucks, Rigdon said.[[In-content Ad]]
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