The Herald Bulletin

February 14, 2014

Council tables water rate increase after four hours of discussion

Residents speak for and against proposal

By Ken de la Bastide
The Herald Bulletin

---- — ANDERSON — The Anderson City Council tabled ordinances dealing with a proposed water rate increase and improvements to the water delivery system. The action came as residents lined up at Thursday's council meeting to speak for and against the rate hike.

Democrats on the council want the proposed increase phased in over two years at either 32 percent or 21.18 percent in 2015 and 11 or 21.18 percent in 2016.

The second ordinance was for the issuance of $14.3 million in bonds for infrastructure improvements to the water utility.

A special meeting of the council will be scheduled when the financial information is determined. A public hearing on the rate increase will take place on March 13.

The council listened to almost four hours of comments from city officials, consultants and residents before deciding to table the ordinance.

Tammy Rimer, a member of the Anderson/Madison County Chamber of Commerce board of directors, provided letters in support of the increase from Hoosier Park and Phillip Lavelle financial.

The letter from Hoosier Park noted it was the second largest customer of the water utility. It recognized there would be an increase in costs, but there was a need to stabilize the water utility for residential and business growth.

Lavelle wrote that it takes financial investments to turn potential in the city of Anderson into reality.

He said the rate increase makes perfect sense and was reasonable to get the community to thrive and grow.

Local resident Kelly McVey said she is on a fixed income and didn’t agree with the requested 47 percent increase.

“You’re digging into our pockets deeper,” she said.

McVey mentioned the latest Indiana State Board of Accounts audit of the city, which questioned the spending of utility dollars to fund civil city operations.

“The city should be lean before reaching into our pockets,” she said.

Resident Tim Harvey said the increase seems small at approximately $6 per month, but it comes on top of property tax increases.

He said he knows the Anderson City Council has no control over the utility department budgets, but urged council members to look into the spending.

Other residents mentioned that people on fixed incomes are struggling to keep a roof over their heads and food on the table.

Resident Charles Turner said the water department is losing up to 33 percent of the water supply on a daily basis to leaks.

“We need a good infrastructure to draw businesses to Anderson,” Turner said. “We need to stop kicking the can down the road.”

Two employees with the water department urged the council to approve the increase because their equipment is in bad shape and they don’t have the funds to do their job properly.

Local business owner Ken Koeinski said a problem is that there are times when water is supposed to be disconnected for people spending the winters in Florida and it isn’t.

He said when leaks occur, the water continues to flow.

Koeninski said the city has a system that should tell the water utility when an exceedingly high volume of water is being used.

Council President Pam Jones requested that Tom Brewer, superintendent of the Anderson Water Department, determine if the department’s system could inform employees if there is large water usage from one address.

Brewer said he would check to determine if the current system would be able to monitor usage. He said it can be done manually at the present time.

Accountant John Skomp of Crowe Horwath said without a rate increase the water utility will be $1 million in the red at the end of the year. He said the phased-in rate hike would eliminate the deficit by the end of 2015 and allow the city to issue the bonds. Skomp recommended the rate be phased in at 32 percent in 2015 and 11 percent in 2016.

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.

Skomp 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.

Follow Ken de la Bastide on Twitter @KendelaBastide, or call 640-4863.