ANDERSON — Despite objections from some members, the Anderson City Council Thursday night gave preliminary approval to a two-year phased-in rate increase for the Anderson Water Department.
The council voted 5-3 for passage on two readings of an ordinance to raise the water rates by 21.18 percent in both 2015 and 2016.
Council members voting against the increase were Rodney Chamberlain, Ollie H. Dixon, and Ty Bibbs, all Democrats.
By the same vote, the council approved on two readings an ordinance to issue $14.3 million in bonds for infrastructure improvements. The bond issue will be used for the construction of a new water treatment plant, replacement of water mains in the Homewood Addition and upgrading the city’s well fields.
Council members are expected to consider final approval of the rate increase and bond issue at their March 13 meeting.
Bibbs, Chamberlain and Dixon all wanted assurances that the rate increase would not be used to increase salaries of water department employees.
"Will there be no raises until the new treatment plant is completed?" Bibbs asked.
Pete Heuer, chairman of the Anderson Board of Public Works, said the rate request is based on the test year of 2012.
"I can't project raises or insurance cost increases," he said. "We're in contract negotiations."
Chamberlain wanted a guarantee that there would be no pay raises.
"I can't make that guarantee," Heuer said. "I will guarantee we will work to preserve the water utility."
John Skomp, an accountant with Crowe Horwath, said the phased-in rate increase will work for the water department to eliminate a projected $1 million deficit and to fund infrastructure improvement bonds.
"We want to get through the Indiana Utility Regulatory Commission process as quickly as possible," he said. "That will allow the start of the project (infrastructure improvements) to start in 2016, at the latest."