ANDERSON — The Anderson City Council recently approved a $1.2 million loan to the city’s water department to bridge the cash-flow gap over the next year.

The loan from the sewer department to the water department was originally approved in December 2013 in the amount of $700,000. An additional $500,000 was approved in June 2014.

Anderson City Controller Jason Fenwick said at the Dec. 10 council meeting that the cash flow for the city’s water department turned positive in October.

“We can start making some payments next year,” he said. “The loan won’t be repaid in 2016.”

Fenwick said in June the loan would be repaid to the sewer department as increased revenues for the water department are received resulting from a 47 percent rate increase approved by the Indiana Utility Regulatory Commission earlier this year.

The approved rate increase was for 21.18 percent in 2015 and 2016 and to issue $14.3 million in bonds for infrastructure improvements.

The increase will result in the monthly bill for the minimum user of 3,000 gallons or less climbing from $13.36 to $19.62, and the bill for the average user of 5,000 gallons increasing from $18.98 to $27.87.

The council approved the rate increase and the bond by a 5-3 vote in 2014.

The $14.2 million loan from the state’s revolving loan fund will be used to replace four wells in the Lafayette well field; for improvements to the water delivery system in the Homewood Addition; and for the construction of a new Lafayette water treatment plant.

The Anderson Board of Public Works approved contracts in December with Fredericks Inc. of Pendleton in the amount of $1,612,566 to replace the four wells and $1,679,269 with Watson Excavating of Redkey to replace the water mains in the Homewood Addition.

The work in the Homewood Addition will replace the existing two-inch water lines with six-inch lines between Scatterfield and Rangeline roads.

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

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