LEESBURG – Leesburg Town Council tabled a decision Monday on raising the town’s sewer rate.
Nicole Grzybowski, of Baker Tilly, presented the Council with the town’s sewer rate review, where it was recommended the town increase the user fee portion of the sewer rate by 8.9% from $32.30 to $38.80, increasing the total sewer rate from $73 a month to $79.50 a month.
During Monday’s meeting, Grzybowski presented an overview of the sewer rate review to the Council before presenting the recommended increase.
Grzybowski said the review included a snapshot of the sewer’s current funds, which is laid out as of Dec. 31 and takes into account the last full fiscal year.
As of Dec. 31, there was around $401,000 in the utility fund and the minimum amount recommended in the bond ordinance is $224,000, so there was excess amount of $177,000 at the end of 2021. She said, overall, the cash position looked good as of 2021.
The amortization bond schedule says the utility is making payments of $157,000 a year at a fixed rate of 4.125% toward its bond payments. The town has approximately $2.5 million outstanding on the bond for the sewer, which is set to mature Jan. 1, 2048.
Part of the review looked at the perspective operating expenses that are estimated to be aligned with an analysis Baker Tilly did with some adjustment. Baker Tilly used 2021 as a baseline. The utility spent around $155,000 in operating dispersements.
The adjustments included were performance-based salary increases and included a fee to do a sewer rate every two years. After the adjustments, operating expenses were brought to about $151,000. Baker Tilly added two years of 5% for inflation. After all the adjustments, it brought it up to $171,000 in operating cost dispersements, Grzybowski said.
Net annual revenue requirements for the sewer was $365,000. The way the rates are set up, the rate brings in $331,000 a year with around $5,000 in penalties such as late fees, she said. It leaves the town needing about $30,000 a year.
Grzybowski said if the town does want to increase the rates as recommended, bringing up the rate by $6.50 a month, she said the town has some options. The town could do the rate increase all at once, do it over two year or do the increase over three years. While the Council was not required to have made a decision Monday, Grzybowski said Baker Tilly recommended the Council make a decision in the next year.
Street Commissioner Craig Charlton asked if the town had ever had a rate increase for the sewer. Councilman Tom Moore said there wasn’t. Councilman Doug Jones said he has property in other towns and he’s seen at least three increases in sewer rates over the years. Jones said the town is required to do a sewer rate study every three years and Moore said this is the third study the town has done.
Moore said the sewer system was installed in 2009 and maintenance is going to be a continuing cost. The town just spent $21,000 for 10 new pumps. Derek Tenney, of Tenney & Sons, said the town currently has 225 pumps in service in town.
Jones said he knows the rate raise is controversial, but knowing the sewer system is going to have continued equipment failure and it’s going to get worse, “I think we need to get the coffers covered.”
Grzybowski said if the Council decides to raise the sewer rates, it will take a minimum of two meetings to adopt the new rate.
Moore said he thinks it should be on the Council’s agenda for discussion for a couple months until the Council figures out what it wants to do. Jones said, in his opinion, the Council needs to make a decision by the beginning of the year.
In other business, Jones said the issue of traffic control in the town of Leesburg has been resolved. Jones said the town has been able to find a better deal than going with a contract with the Claypool Police Department and it won’t cost Leesburg anything.
Jones said Leesburg will be able to have a law enforcement officer from neighboring towns or from the Kosciusko County Sheriff’s Office through Operation Pull Over. He said as long as the program is in place, the town will use that program.
Moore said if the situation doesn’t work out, the Council can always reconsider the contract with CPD.
In other business, the Council:
• Learned there are two speed limit signs that are planned to be put on Church Street.
• A severe weather alert system alert system has been completed at the Plain Township Fire Station. Typically, Charlton said, the system is going to be tested every Saturday at noon.
