ANDERSON – The Anderson City Council will be considering tonight whether to increase water utility rates by 47 percent.
The council meets at 7 p.m. in the council chambers of City Hall and will consider two ordinances involving the water utility.
One ordinance is for an across-the-board rate increase of 47 percent, which will also have to be approved by the Indiana Utility Regulatory Commission. The second is for the issuance of $14.3 million for infrastructure upgrades.
With the Democratic Party holding a 7-to-2 majority on the council, the rate increase could prove to be a tough sell for the administration of Mayor Kevin Smith.
Councilman David Eicks, chairman of the council’s budget committee, said Wednesday he asked the administration to lower the amount of the increase being requested.
“I want to see it lowered significantly,” he said. “If the 47 percent increase is deemed to be necessary it should be phased in over time.”
Eicks recommended a 15 percent increase every two years for six years.
“It’s too big a hit,” he said of the 47 percent rate increase request. “I agree our water resources are an asset for the city. I just need to be sure the increase is warranted.”
Eicks said he requested the city provide additional information to the council before the meeting on the impact of spreading the increase out over several years.
Several council members have indicated that local residents are concerned about the 47 percent increase, which 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.
Council members could vote to lower the percentage of the proposed increase.
Pete Heuer, chairman of the Anderson Board of Public Works, said the administration is willing to discuss any proposal from the council.
“We want to explain why the increase is needed, which is based on sound accounting practices,” Heuer said.
“If the council wants us to consider a reduction, we will look at it,” he said. “We have looked at several options. We want to ensure the viability of the water utility.”
City officials said 31 percent of the proposed 47 percent rate increase will go toward general operating and maintenance expenses with the remainder going toward paying off the bond issue.
The bond issue will be used for the construction of a new water treatment plant, replacement of water mains and upgrading the city’s well fields.
Anderson issued $5.3 million in bonds for the water department in 2006 and the outstanding amount is $4.1 million.
In December, the City Council approved a $700,000 loan from the sewer department to the water utility. The loan is to be repaid by June 30.
Follow Ken de la Bastide on Twitter @KendelaBastide, or call 640-4863.
Anderson City Council to consider 47 percent increase in water rates and a $14.3 million bond issue for infrastructure improvements. Democrats on council want to lower the requested increase or phase in over a period to time. Council meets at 7 p.m. in the council chambers of the Anderson City Building, 120 E. Eighth St.