ANDERSON – Customers receiving their water from the city of Anderson could be looking at a 47 percent increase in user rates if approved by the state.
The City Council is being asked tonight to consider approving an ordinance to request a rate increase and to issue bonds in the amount of $14.3 million for infrastructure upgrades.
The council meets at 7 p.m. in the council chambers of the Anderson City Building.
Currently the minimum cost for a user of approximately 3,000 gallons of water is $6.26 and could increase to $12.26. For the average homeowner using up to 5,000 gallons of water per month, the current rate is $18.98 and may increase to $27.88.
The Anderson Board of Public Works approved two resolutions Tuesday in support of the rate increase and the proposed bond issue.
The last increase for the water utility was seven years ago, Pete Heuer, chairman of the Board of Public Works, said.
Tom Brewer, superintendent of the Water Department, said the council action is the start of a lengthy process that requires a review and approval of new water rates by the Indiana Utility Regulatory Commission (IURC).
Brewer said, if the increase is approved by the IURC, the new across-the-board rate increases won’t take effect until late this year or early in 2015. He said 31 percent of the rate increase would go toward general operating and maintenance expenses and the remaining 69 percent would go toward the bond issue.
Brewer said 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.
The city has plans to replace the Lafayette Water Treatment Plant. Brewer said engineers have determined it’s more cost effective to build a new plant instead of upgrading the existing one.
“We will replace the plant and then demolish the existing one,” Brewer said. “Construction work will start in 2015 and take about a year to complete.”
Proceeds from the bond issue will be used to replace several miles of 2-inch water mains with a 6-inch main in the Homewood addition. The area to be constructed extends from Rangeline Road west to Scatterfield Road and from 10th Street north to Indiana 32.
“Those lines are leaking a lot water,” Brewer said. “The new mains will provide better fire protection and increase water pressure.”
The city 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.
Jason Fenwick, city controller, said at the time that the water utility budget is “tight” with several payments due early this year. He said that was causing a cash flow problem for the water department.
Follow Ken de la Bastide @KendelaBastide on Twitter, or call 640-4863.
If you go Anderson City Council meets at 7 p.m. today in the council chambers at the City Building, 120 E. Eighth St. The meeting is open to the public.