Council Hears Details Of 2nd Sewer Rate Hike
November 9, 2018 at 6:39 p.m.
Council Hears Details Of 2nd Sewer Rate Hike
By Dan [email protected]
The second rate increase, if approved, and combined with one last year, will result in about a 26 percent increase for the average residential customer, which is less than earlier estimates of 39 percent.
But questions arose Monday night about other aspects of the proposed rate structure for small industry and customers in Leesburg and Winona Lake.
Council cast a preliminary 5-2 vote in support of the proposed changes Monday. Councilman Ron Shoemaker and Cindy Dobbins opposed it.
A final vote is expected Nov. 19 when the city conducts a formal public hearing on the matter.
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The two rate hikes are needed to cover the cost of a $10 million renovation of the city’s sewer collection infrastructure and the $31 million in improvements to the sewer treatment plant, which are needed as the city begins to reach its treatment capacity.
Details of the rate hike were presented by Jeffrey Rowe of Umbaugh.
The new estimates and rate structure are based on a cost-of-service study sought by the city.
The changes in rates also coincide with a transition in billing from a flat rate to one based on the amount of use, a move that most agree is more equitable and fair.
But the formula for some customers is complicated by the calculation relying on meter sizes. In general, customers using larger meters will see higher bills.
Based on an average flow use of 4,000 gallons per month, residential customers can expect to see a monthly sewage bill of about $41.15, compared to $32.60 they were paying in 2008.
In one surprising development, estimates based on the new rate structure indicates customers in apartments will see, on average, an 11 percent decrease in bills.
By basing bills on the amount of use, Mayor Joe Thallemer said apartment dwellers – especially those with one or two people sharing an apartment – will likely see decreases.
Big families, on the other hand, will likely pay more, he said.
He said the change represents “a truing up” with what customers actually use and should pay.
“By and large, I think it’s coming out pretty fair,” Thallemer said.
On the other hand, small businesses are expected to see bills rise. One estimate suggested small businesses could see a hike of about 51 percent.
Thallemer said he’s received some calls from businesses concerned about the change.
Shoemaker said he was perplexed over the impact on small business.
Zimmer Biomet, the biggest industrial user in the city, would see monthly bills rise 21 percent. The company’s average bill would rise from $58,709 to $73,000 under the new plan, Rowe said.
Councilman Jeff Grose said he believes the switch to billing based on flow is the best approach, even though his family will likely see bills close to $100 a month.
Winona Lake and Leesburg would see about a 12 percent increase.
Some council members questioned why the towns would pay less.
The smaller hike is due to the fact that the towns paid large fees up front for capacity and have not been using as much as expected, Thallemer said.
Monday’s discussion was more mild than a year ago when apartment dwellers opposed the first rate hike. Questions from the public were more subdued as well.
Among those asking questions Monday were Chad Zartman, who owns apartments in the city, and a representative of an apartment complex.
In a related matter, council is expected to consider delaying the start date of the increase to allow more time for city employees to prepare for the billing change.
Clerk-Treasurer Lynne Christiansen said she would like to see the new rate kick in for bills sent in February.
The city also took another step toward securing financing and learned that nearly all of the project will be subject to a 2 percent interest rate, as a result of participating in a state revolving loan program.
The city will save several million on its $10 million infrastructure project last year because of low interest rate, but officials still don’t know how much the city might save with the $31 million project.
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The second rate increase, if approved, and combined with one last year, will result in about a 26 percent increase for the average residential customer, which is less than earlier estimates of 39 percent.
But questions arose Monday night about other aspects of the proposed rate structure for small industry and customers in Leesburg and Winona Lake.
Council cast a preliminary 5-2 vote in support of the proposed changes Monday. Councilman Ron Shoemaker and Cindy Dobbins opposed it.
A final vote is expected Nov. 19 when the city conducts a formal public hearing on the matter.
[[In-content Ad]]
The two rate hikes are needed to cover the cost of a $10 million renovation of the city’s sewer collection infrastructure and the $31 million in improvements to the sewer treatment plant, which are needed as the city begins to reach its treatment capacity.
Details of the rate hike were presented by Jeffrey Rowe of Umbaugh.
The new estimates and rate structure are based on a cost-of-service study sought by the city.
The changes in rates also coincide with a transition in billing from a flat rate to one based on the amount of use, a move that most agree is more equitable and fair.
But the formula for some customers is complicated by the calculation relying on meter sizes. In general, customers using larger meters will see higher bills.
Based on an average flow use of 4,000 gallons per month, residential customers can expect to see a monthly sewage bill of about $41.15, compared to $32.60 they were paying in 2008.
In one surprising development, estimates based on the new rate structure indicates customers in apartments will see, on average, an 11 percent decrease in bills.
By basing bills on the amount of use, Mayor Joe Thallemer said apartment dwellers – especially those with one or two people sharing an apartment – will likely see decreases.
Big families, on the other hand, will likely pay more, he said.
He said the change represents “a truing up” with what customers actually use and should pay.
“By and large, I think it’s coming out pretty fair,” Thallemer said.
On the other hand, small businesses are expected to see bills rise. One estimate suggested small businesses could see a hike of about 51 percent.
Thallemer said he’s received some calls from businesses concerned about the change.
Shoemaker said he was perplexed over the impact on small business.
Zimmer Biomet, the biggest industrial user in the city, would see monthly bills rise 21 percent. The company’s average bill would rise from $58,709 to $73,000 under the new plan, Rowe said.
Councilman Jeff Grose said he believes the switch to billing based on flow is the best approach, even though his family will likely see bills close to $100 a month.
Winona Lake and Leesburg would see about a 12 percent increase.
Some council members questioned why the towns would pay less.
The smaller hike is due to the fact that the towns paid large fees up front for capacity and have not been using as much as expected, Thallemer said.
Monday’s discussion was more mild than a year ago when apartment dwellers opposed the first rate hike. Questions from the public were more subdued as well.
Among those asking questions Monday were Chad Zartman, who owns apartments in the city, and a representative of an apartment complex.
In a related matter, council is expected to consider delaying the start date of the increase to allow more time for city employees to prepare for the billing change.
Clerk-Treasurer Lynne Christiansen said she would like to see the new rate kick in for bills sent in February.
The city also took another step toward securing financing and learned that nearly all of the project will be subject to a 2 percent interest rate, as a result of participating in a state revolving loan program.
The city will save several million on its $10 million infrastructure project last year because of low interest rate, but officials still don’t know how much the city might save with the $31 million project.
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