Chesterton households will see a sanitary sewer rate hike of around 6
percent on their bimonthly bills next year.
At its meeting Monday night, the Town Council voted 4-0 to approve on first
reading an ordinance raising the rate, 4-0 to suspend the rules, then 4-0 to
approve the ordinance on final reading.
The hike will take effect on Jan. 1.
Under the increase, the average residential household using 10,000 gallons
of water per month will see its bimonthly bill rise from $76.80 to $81.26: a
hike of $4.46 or $2.23 per month or 5.81 percent.
The Utility Service Board previously endorsed the rate hike, needed to pay
for the long term control plan to reduce combined sewage overflows into the
Little Calumet River. The plan—mandated by the U.S. Environmental Protection
Agency and administered by the Indiana Department of Environmental
Management—provides for the construction of a 1.2-million storage tank to
hold stormwater in the system during heavy rain events. The estimated cost
of the tank and associated upgrades to the wastewater treatment plant and to
the collection system: $14.9 million.
The Service Board is seeking to finance that project through a loan from the
State Revolving Fund and will repay that loan with the proceeds of the rate
Ted Sommer of London Witte Group, the Utility’s contracted rate consultant,
made a couple of points at Tuesday’s public hearing on the proposed hike.
The first is that the long term control plan—or LTCP—is an “unfunded
mandate.” The Utility has no choice in the matter, the LTCP must be
implemented, and the 1.2-million tank must be built, Sommer said.
Sommer’s second point was this: one might have expected a rate hike much
larger than 6 percent, given the $15 million in new debt which the Utility
is about to assume. But the Utility, Sommer emphasized, has made great
strides in cutting operating expenses since 2009. “I believe you have a
utility that is watching its dollars and cents and operating better now than
it was a couple of years ago,” he said.
Only one person spoke on the proposed hike during the public hearing: Paul
Tharp, who voiced his support of it. “The Utility is handcuffed,” he said.
In any case, “I want to see them stop bypassing.”
Member Emerson DeLaney, R-5th, later in the meeting revisited Sommer’s point
about the mandated nature of the LTCP. “This is a mandated, unfunded project
to keep our water clean,” he said. “Somebody has to pay for it.”
“I want to commend the Utility Board on its management, so we could keep
this rate increase to a minimum,” added Member Jim Ton, R-1st.
The most recent sanitary sewer rate hike went into effect on April 1, 2011:
one of 2 percent, enacted to offset the costs of maintaining the Town of
Chesterton’s collection system.
Two years before that, on Jan. 1, 2009, a 14-percent rate hike went into
effect, to support the 2009 bond issue. That hike did have the effect of
improving the Utility’s cash position, one of the factors which President
Larry Brandt has said is keeping this most recent rate hike lower than it
might otherwise have had to be.
A final reason for the lower requested rate hike is that the $14.9 million
debt assumed for the LTCP will be “wrapped,” that is, larger payments on
that debt will be backloaded to later years, when other sewer bonds are due
to retire. That will have the effect, as Sommer has put it, of “levelizing”