Chesterton Tribune

Tough times get tougher: Council enacts rate hikes

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By KEVIN NEVERS

Chesterton residents should prepare themselves for a bi-monthly double-whammy next year, after the Town Council at its meeting Monday night enacted a 38-percent increase in the refuse and recycling fee and a 14-percent increase in the sanitary sewer rate.

Together those increases will raise the bi-monthly refuse and recycling/sanitary/stormwater bill for the average residential household by $19.25 or more than 19 percent.

Members were unanimous on the need to increase the refuse and recycling rate and indeed had little choice in the matter.

The current three-year contract with Able Disposal expires on Dec. 31 and Able’s low bid for the next contract reflects a 38-percent spike in the price for the first year. Right now the Town of Chesterton is paying Able $10.05 per household per month; in 2009 it will pay $13.95, in 2010 $14.72, and in 2011 $15.53.

Members accordingly voted 5-0 to approve on first reading a new refuse and recycling fee schedule, 5-0 to suspend the rules, then 5-0 to approve the new schedule on final reading.

That schedule: $14.50 in 2009; $15.25 in 2010; and $16.00 in 2011.

Members were not, however, unanimous on the question of the sanitary sewer rate. The proposed 14-percent single-phase hike came to the council with a 3-2 split endorsement from the Utility Service Board, two of whose members—Street Commissioner John Schnadenberg and Jim Raffin—preferred to see the rate increase implemented in two phases: 7 percent in 2009, 7 percent in 2010.

The council, in the end, split the same way: 3-2 to enact the 14-percent single-phaser, with members Jeff Trout, R-2nd, Sharon Darnell, D-4th, and Emerson DeLaney, R-5th, voting in favor of it, and President Jim Ton, R-1st, and Member Dave Cincoski, R-3rd, voting in opposition.

Currently the average refuse and recycling/sanitary/stormwater bill looks like this:

•Refuse and recycling: $21 ($10.50 x 2).

•Sanitary: $66 ($33 x 2).

•Stormwater: $12.20 ($6.10 x 2).

•Total: $99.20.

In 2009 the average bill, in contrast, will look like this:

•Refuse and recycling: $29 (14.50).

•Sanitary: $77.25 ($38.63 x 2).

•Stormwater: $12.20 ($6.10 x 2).

•Total: $118.45, or an increase of $19.25 or 19.4 percent.

Refuse and Recycling

At a public hearing which preceded the vote on the refuse and recycling fee, one person spoke against the proposed hike: Barb Stroud, who voiced the concern that “not everybody’s going to be able to pay that.” Stroud specifically asked whether there is a mechanism in the contract to lower the price in view of the plunging cost of fuel, then urged the council “to think outside the box": possibly cutting garbage collection to twice a month for those who request it. “I think we need to look at all avenues, for what’s best for our taxpayers.”

Town Attorney Chuck Lukmann, while noting in response that “diesel fuel is a component” of the contract price—though “not the main component"—did say that the bid specifications do include a bi-annual review of the contract, on June 30 and Dec. 31, for the purpose of making adjustments in light of fuel costs.

Thus, Lukmann explained, for every 20-cent change in the price of fuel, as determined by statistics kept by the U.S. Department of Energy, there will be a 7-cent adjustment per unit per month in the contract price. So, for example, on June 30, 2009, a decrease of $1 in diesel fuel since the award date in October would result in a 35-cent decrease in the contract price.

Lukmann added that a monthly review—rather than a bi-annual one—could create a situation in which the fee charged to residents would be “inadequate” to cover fuel-adjusted increases in the contract price.

Schnadenberg for his part emphasized that he does not “take lightly” the increase in the refuse and recycling fee, and in particular the 55-cent portion of the fee over and above the $13.95 needed in 2009 to cover Able’s services. Schnadenberg noted that the Indiana Department of Local Government Finance cut his 2008 Motor Vehicle Highway budget—used for the Street Department’s daily operations—by $100,000, and the long and the short of it is that “we are at a point where we have to make a decision": either drastically reduce the services to which residents have grown accustomed—weekly leaf and brush collection, for instance—or increase the amount charged in the refuse and recycling fee. 

“We can’t keep absorbing costs,” Schnadenberg said.

Meanwhile, DeLaney said that he has received calls from four residents asking why the plunge in fuel costs is not reflected in the contract price. DeLaney then blamed the press for giving residents the incorrect impression that the spike in Able’s contract price was driven chiefly by the spike in fuel costs earlier this year.

Lukmann did observe that the council could opt to advertise for new bids for refuse and recycling, but that the current contract expires on Dec. 31 and that there would be no way to award a new one by the end of the month.

Sanitary

The proposed 14-percent increase in the sanitary sewer rate has been hanging fire since August, when disgruntled members instructed the Utility Service Board to compile better numbers in justification of a single-phase increase.

Those numbers persuaded just enough members to go for the whole of the 14 percent in 2009.

Darnell—who has never wavered in her belief that a single-phase 14-percent hike is necessary—repeated  the conclusions reached by H.J. Umbaugh & Associates, the Utility’s contracted financial consultant, about the need for that increase, especially in light of the $600,000 spent on the emergency main replacement beneath Porter Ave. this summer.

Trout attributed the need for a 14-percent hike to the “$2 million” cost overrun in the expansion of the wastewater treatment plant. “We got bad information on what the plant would cost and didn’t bond enough to pay for it,” he said, requiring the Utility to dip into its cash reserves to make up the difference. “It’s a mistake made years ago and now we’re paying catch up.”

Ton disagreed. “I firmly believe we could do 7 percent and 7 percent and bond for what we need to do,” he said. “Fourteen percent in this times is asking too much from the people.”

From the floor, earlier in the meeting, Paul Tharp concurred with Ton. “We’re all of us facing tough times,” he said, “and it would be very burdensome for the residents of Chesterton to take it all in one lump.”

The 14-percent increase next year follows a 34-percent hike which took effect in 2007. That 34-percent increase, in turn, followed a two-phaser which increased rates by 5.8 percent in 2005 and then by 5 percent in 2006. Bottom line: in 2004 the average residential household was paying $44.30 every two months for sanitary sewer service; in 2009 it will be paying $75.25. That figure represents a total increase of nearly 70 percent in just five years.

 Posted 12/9/2008