Utility Service Board has voted unanimously to recommend a rate hike which
would increase the bimonthly bill of an average Chesterton residential
customer using 10,000 gallons by 3.01 percent.
The Service Board
approved that recommended rate hike at a special meeting on March 12, as
President Larry Brandt noted at the Service Board’s regular monthly meeting
A 3.01-percent rate
hike for an average Chesterton residential customer would increase the
bimonthly bill from $85.84 to $88.42.
hikes for other classes of customer:
--The Town of
Porter: 5.22 percent. Based on average usage, the town’s monthly payment to
the Utility would increase from $56,598.10 to $59,552.34.
Boundary Conservancy District: 5.21 percent. Based on average usage, the
district’s monthly payment to the Utility would increase from $6,523.94 to
--Fox Chase Farms
residents: 0.66 percent. A Fox Chase Farms resident’s monthly payment would
increase from $98.53 to $99.18.
As it happens, the
recommended hike for Chesterton ratepayers is marginally higher than the
original rate calculated by the Utility’s contracted financial consultant,
London Witte Group. That’s because the original rate did not separate out
from the other classes of customer the so-called Payment in Lieu of Taxes (PILT)
made by the Utility to the Town of Chesterton’s General Fund, an annual
payment of $152,000 which the Utility has agreed to provide in support of
the wage increases granted last year by the Town Council to municipal
As a public
utility, the Chesterton Utility does not pay property taxes but under state
law a municipality may collect from a utility an annual amount
equivalent to what the utility would pay in property taxes if it were
a private entity. Of course, the Chesterton wastewater treatment plant is
located in Porter, so the Utility is making a Payment in Lieu of Taxes on
its infrastructure installed in the Town of Chesterton only, that is, on its
underground collection systems and the series of lift stations.
At a workshop held
last month on the biennial rate study, President Larry Brandt made it clear
that under no circumstances should the Utility’s outside users--the Town of
Porter, the Indian Boundary Conservancy District, Fox Chase Farms, and
Whispering Sands Mobile Home Park--be held responsible for any portion of
the $152,000 PILT, inasmuch as that amount is going toward the wages and
salaries of Town of Chesterton municipal employees and not in any way toward
the treatment of those outside users’ wastewater.
calculated by London Witte Group--with the PILT not separated
out--Chesterton residents would have seen their rates increase somewhat
less, by 1.88 percent; while the Utility’s two main outside users would have
seen theirs increase somewhat more: the Town of Porter and the Indian
Boundary Conservancy District, by 9.88 percent.
There are several
reasons why a rate hike is necessary at this time, London Witte Group
adviser Sue Sargent Haase noted at the workshop held last month. Under the
Utility’s agreement with the State Revolving Fund--which provided financing
for the 1.2-million gallon storage tank built to reduce combined sewer
bypasses into the Little Calumet River during rain events--the Utility’s
rates must generate net operating revenues equal to at least 125 percent of
its maximum annual debt service. Rates need to be increased in order to meet
this commitment, Haase told the Service Board.
said, without a rate increase the Utility would be very near the limit on
its bonding capacity, and the recommended rate hike would go some way to
funding and maintaining the Utility’s capital investment plan.
Utility is subject--like any other public or private entity--to inflationary
pressure, as its annual operating expenses continue to increase: wages,
pensions, and benefits, for instance; purchased power; and to some extent
recommending to the Town Council I think can be swallowed by the town,”
Member Scot McCord ventured at Monday’s meeting. “I hope so.”
The next step is
for the Town Council to schedule a public hearing on the recommended rate
hike. Should the council vote to approve it, the hike would take effect
sometime later this year.
The last rate hike
approved by the council took effect on Jan. 1, 2017. That hike increased the
average household’s bimonthly bill by 5.64 percent: from $81.26 to $85.84.
In other business,
members voted unanimously to grant the Olthof Homes LLC an allocation of the
wastewater treatment plant for its planned unit development dubbed
Springdale, located south of 1050N immediately west of the Abercrombie Woods
Springdale will be
comprised chiefly of single-family units with some duplexes as well.
February in Review
Chesterton used 55.79 percent of its 3,668,000 gallon per day (gpd)
allotment of the wastewater treatment plant; Porter, 62.68 percent of its
851,000 gpd allotment; the Indian Boundary Conservancy District, 86.88
percent of its 81,000 gpd allotment; and the plant as a whole, 57.61 percent
of its capacity.
There were no
bypasses of wastewater into the Little Calumet River last month, which saw a
total of 1.77 inches of precipitation recorded at the plant.
In February, the
Utility ran a deficit of $121,737.11 and in the year-to-date is running a
surplus of $183,398.50.