Syracuse Sewer Rate Hike Likely
July 28, 2016 at 4:25 p.m.
By Kathy [email protected]
The next step is a public hearing scheduled for April 15.
Sue Haase, CPA at London Witte Group, presented a three-phase plan. She said after working with Town Manager Henry DeJulia, Clerk Julie Kline, Public Works Director Jeremy Sponseller and Council President Brian Woody, the group came up with a staggered rate hike plan that would raise the funds needed right now and continue to build up a reserve through the next couple years.
The sewer rate has not increased in 22 years, she told council. The first stage of the plan would raise it 29 percent. That would garner enough money to replace some 25-year-old equipment at the plant, including two clarifiers, UV system and a belt press.
Estimates of the needed renovations could run from $750,000 to as high as $1 million.
“These numbers are preliminary,” said Sponseller, adding, “the costs were determined by engineer reviews.” In order to avert “catastrophic failure” according to the committee, sewer rates would go up 29 percent in the first phase.
“We need to get the plant back into working order,” said Haase. She further explained that the money needed right away would come from bond anticipation notes, or BANs. The town would pay interest on the borrowed notes, then later enter into a loan agreement through state funding bonds.
The second year’s hike would be 5.86 percent, and that would cover “anything additional that comes up,” Sponseller said. “The second phase is to get engineers to tell us what else is needed.”
The third year’s rise is 31.31 percent. Haase said that by that time, the town should have enough reserve to operate without taking emergency measures, or “be up to speed.”
The amount to be borrowed, an unknown number Haase estimated at $2.6 million, would be spread over 20 years at a rate of around 4.75 percent with no major changes. By taking care of immediate needs and putting a little aside in reserve, Haase said they would be in good position to get a favorable interest rate.
“We do have an interest and rate risk,” she said, but “we gave it as much maneuverability as necessary.”
“What is this going to cost a family of four?” asked Councilman Larry Siegel.
Right now Syracuse residents are charged $5.42 per 1,000 gallons, said Kline. “And that’s the 1992 rate.” The new rates are determined on 4,000-gallon-a-month usage. That means a family paying $23.50 a month for those 4,000 gallons, which includes a $1.82 billing charge, will see their bill go up to $29.79 a month.
Councilman Kathy Beer asked why they don’t combine the first two phases and reserve a little more money.
Woody said, “The biggest reason we looked at the three phases is that we have an immediate need.”
Kline added, “The three phases are just for the customers. The thought was to impact the customer as little as possible.”
Bill Musser asked if it would be wise to institute a consumer price index, or annual fixed incremental increases. “After we’re up to where we should be, should we put a CPI in place?”
Haase said that she would have to investigate that issue, as CPIs are not always the best answer.
Council members agreed that nobody likes a rate hike, but they voted unanimously to adopt the new ordinance upon first reading. There is still a second reading and public hearing before it becomes final.
Councilman Paul Stoelting exclaimed, “We should look at these rates more often than every 20 years.”
Siegel agreed, and said, “This is part of what we have to do as part of our obligation.” He also said, “The costs never go down, never.”
In other business, council:
• Heard an annexation request by Robert J. Wicker and Paula Kehr-Wicker, 4572 Fox Run Drive, Syracuse. The couple’s property is adjacent to that of Wawasee High School. Town attorney Vern Landis will investigate the matter, and the council will continue its discussion next month.
• Approved $39,164 for the purchase of new water meters. The first purchase will replace those at Oakwood Park.
• Approved a request to purchase phones, radios and a warning system for the new addition to Fire Station #1 for $6,915.33.
• Heard a proposal for one-way streets at Oakwood to help alleviate parking issues. Council directed Police Chief Tony Ciriello to meet with the property owners association president and owner of Oakwood Inn to make sure “everyone was on the same page.”
• Approved plans for two signs at the technology park for a cost of $56,000. The plan will have to be approved by the Economic Development Agency and Elkhart County Commissioners.
• Approved a new contract for the police department which would bind new employees to their jobs for three years, or charge them for leaving before that time. The department is looking for ways to recoup money spent on training recruits.
• Approved the purchase of two new police cars from Sorg Dodge, Goshen, for $27,526 with trade-ins.
• Heard that the park department will sponsor two Easter Egg Hunts: one April 11 for middle school students at night, after the dance; and another for children up to fifth-grade, April 12 at Lakeside Park.
• Approved continuing a water-rate credit for residents who keep their water running due to freezing conditions.
[[In-content Ad]]
Latest News
E-Editions
The next step is a public hearing scheduled for April 15.
Sue Haase, CPA at London Witte Group, presented a three-phase plan. She said after working with Town Manager Henry DeJulia, Clerk Julie Kline, Public Works Director Jeremy Sponseller and Council President Brian Woody, the group came up with a staggered rate hike plan that would raise the funds needed right now and continue to build up a reserve through the next couple years.
The sewer rate has not increased in 22 years, she told council. The first stage of the plan would raise it 29 percent. That would garner enough money to replace some 25-year-old equipment at the plant, including two clarifiers, UV system and a belt press.
Estimates of the needed renovations could run from $750,000 to as high as $1 million.
“These numbers are preliminary,” said Sponseller, adding, “the costs were determined by engineer reviews.” In order to avert “catastrophic failure” according to the committee, sewer rates would go up 29 percent in the first phase.
“We need to get the plant back into working order,” said Haase. She further explained that the money needed right away would come from bond anticipation notes, or BANs. The town would pay interest on the borrowed notes, then later enter into a loan agreement through state funding bonds.
The second year’s hike would be 5.86 percent, and that would cover “anything additional that comes up,” Sponseller said. “The second phase is to get engineers to tell us what else is needed.”
The third year’s rise is 31.31 percent. Haase said that by that time, the town should have enough reserve to operate without taking emergency measures, or “be up to speed.”
The amount to be borrowed, an unknown number Haase estimated at $2.6 million, would be spread over 20 years at a rate of around 4.75 percent with no major changes. By taking care of immediate needs and putting a little aside in reserve, Haase said they would be in good position to get a favorable interest rate.
“We do have an interest and rate risk,” she said, but “we gave it as much maneuverability as necessary.”
“What is this going to cost a family of four?” asked Councilman Larry Siegel.
Right now Syracuse residents are charged $5.42 per 1,000 gallons, said Kline. “And that’s the 1992 rate.” The new rates are determined on 4,000-gallon-a-month usage. That means a family paying $23.50 a month for those 4,000 gallons, which includes a $1.82 billing charge, will see their bill go up to $29.79 a month.
Councilman Kathy Beer asked why they don’t combine the first two phases and reserve a little more money.
Woody said, “The biggest reason we looked at the three phases is that we have an immediate need.”
Kline added, “The three phases are just for the customers. The thought was to impact the customer as little as possible.”
Bill Musser asked if it would be wise to institute a consumer price index, or annual fixed incremental increases. “After we’re up to where we should be, should we put a CPI in place?”
Haase said that she would have to investigate that issue, as CPIs are not always the best answer.
Council members agreed that nobody likes a rate hike, but they voted unanimously to adopt the new ordinance upon first reading. There is still a second reading and public hearing before it becomes final.
Councilman Paul Stoelting exclaimed, “We should look at these rates more often than every 20 years.”
Siegel agreed, and said, “This is part of what we have to do as part of our obligation.” He also said, “The costs never go down, never.”
In other business, council:
• Heard an annexation request by Robert J. Wicker and Paula Kehr-Wicker, 4572 Fox Run Drive, Syracuse. The couple’s property is adjacent to that of Wawasee High School. Town attorney Vern Landis will investigate the matter, and the council will continue its discussion next month.
• Approved $39,164 for the purchase of new water meters. The first purchase will replace those at Oakwood Park.
• Approved a request to purchase phones, radios and a warning system for the new addition to Fire Station #1 for $6,915.33.
• Heard a proposal for one-way streets at Oakwood to help alleviate parking issues. Council directed Police Chief Tony Ciriello to meet with the property owners association president and owner of Oakwood Inn to make sure “everyone was on the same page.”
• Approved plans for two signs at the technology park for a cost of $56,000. The plan will have to be approved by the Economic Development Agency and Elkhart County Commissioners.
• Approved a new contract for the police department which would bind new employees to their jobs for three years, or charge them for leaving before that time. The department is looking for ways to recoup money spent on training recruits.
• Approved the purchase of two new police cars from Sorg Dodge, Goshen, for $27,526 with trade-ins.
• Heard that the park department will sponsor two Easter Egg Hunts: one April 11 for middle school students at night, after the dance; and another for children up to fifth-grade, April 12 at Lakeside Park.
• Approved continuing a water-rate credit for residents who keep their water running due to freezing conditions.
[[In-content Ad]]
Have a news tip? Email [email protected] or Call/Text 360-922-3092