ANDERSON — After a lengthy debate Thursday night, the Anderson City Council voted to table a proposed water rate increase, making it clear they were opposed to a one-time increase of 47 percent.
Following a caucus, the seven Democrats on the council indicated support for implementing a rate increase for the city's water utility over a two-year period. Council members discussed a 21.18 percent increase in 2015 and 2016. The accountant hired by the city recommended a two-year phase-in of 32 and 11 percent that would compound to 47 percent.
The council will meet in special session once the final numbers of the phased-in rate increase are determined. It appears that a public hearing on the rate increase and a $14.3 million bond issue for infrastructure improvements will be set for the council's meeting on March 13 to consider passage.
City Controller Jason Fenwick said if the council adopts the 21.18 percent increase for 2015 and 2016 the city will be required to borrow $1 million from the Indiana Bond Bank to eliminate a projected deficit at the end of 2014.
Accountant John Skomp of Crowe Horwath said the $1 million borrowed from the bond bank won't be repaid until 2017 if the rate increase is 21.18 percent, but could be repaid by 2016 at the 32 percent increase the first year.
"I'm comfortable with the 32 percent and 11 percent rate increase," Skomp said. "The 21.18 percent wouldn't cover the negative balance at the end of 2014."
Without a rate increase the Anderson Water Department will be $1 million in the red at the end of the year, Skomp told the City Council.
The council chambers were packed and an overflow crowd was standing in the lobby. Several local residents and business owners spoke for and against the increase.
The proposed 47 percent increase will raise the minimum charge for up to 3,000 gallons from $13.36 to $19.62 per month and for the average customer from $18.98 to $27.88 for using up to 5,000 gallons. What the rate increase would be at 21.18 or 32 percent in 2015 was not known.