Council Contemplates Increasing Local Water Rates

Crothersville water utility customers may see an increase in their water rates following a rate consultant’s presentation at last Tuesday’s town council meeting.
The last rate study and resulting increase occurred in 2005. That allowed for annual incremental increases through January 2010.
Christina Horan of Umbaugh & Associates of Indianapolis gave the council four options to consider with first year increases of 10%, 15%, 17% and 21% each followed with a more modest 2% annual increase for three years.
The three higher increases provide for the purchase of new electronic meters to replace the entire town’s manually read residential meters.
The electronic meters would allow the town to read water consumption every month and not have to estimate usage due to snow cover or inclement weather.
The newer technology would also take fewer workers and less time to complete. A town worker would drive along town streets and an electronic receiver would read the current water consumed and transfer that information to town hall for billing purposes.
Additionally, in the event of a water leak, the consumer would be notified sooner rather than finding out about a leak after reading a higher water bill, sometimes 4-6 weeks after the leak was detected.
“Crothersville is the only utility in this area to still use the old manually read meters,” said water utility superintendent Chris Mains.
To amortize the cost of the new meters over a period of three years would result in a 21% first year increase. Amortizing the meter costs over five years results in a 17% first year increase and a 7-year payback of the new meters would result in a 15% increase.
Horan recommended the town go with the three-year payback and a 21% increase the first year.
But to mitigate any increase she suggested the council refinance two bond issues currently being paid by water users.
Those two bond obligations are a 1994 debt in which the utility is paying 6.25% the other is a 1996 debt which is financed at 5.85% rate.
“We think you can re-finance that debt and get a rate of around 2%,” said Horan. “That would decrease your debt service payment and lower any possible increase.”
That strategy appealed to the council.
“It could be that we won’t have to increase the rates this year,” said councilman Lenvel “Butch” Robinson.
The council agreed to pursue re-financing the water utility debts, see what impact that could have on water rates and the re-visit a possible electronic water meter purchase in the spring.
After discussing water utility improvements and rate hikes, the council turned its attention to the new town hall in the former Methodist Church annex.
The project has been moving slowly but the pace may be increased as the town’s lease on its current structure is set to expire on May 31 of this year.
“To stay here we must notify the landlord (Mark & Leslie Adams) by March 1 of our intention to renew,” said council president Ardell Mitchell.
The council approved contracting the Serv-Pro to remediate a mold problem in the former church building at a cost of $6,619.
The council also set Feb. 24 as the day to award work to renovate the interior of the concrete block building.
In other matters the council:
•Approved adding budgeting and accounting software to the existing billing and payroll software package at a cost of $6,750.
•Learned that town water utility workers successfully repaired a leak in the line at the Muscatatuck River south of town at a cost of $1,200. It was noted that a similar repair done by contractors a few years ago cost the town $10,000.
•Agreed to re-visit and possibly renegotiate a water supply agreement with Stucker Fork Water utility for water use through the line that was repaired by town workers.
•Agreed to spend up to $5,000 to codify the town’s ordinances. Codify means to place all ordinances in an indexed, easily referenced volume for ease of determining what locally enacted laws the town must follow.
•Declined to take action on a request by Peoples Bank to repair asphalt at a driveway to the back on Walnut Street. “I believe the problem is on the bank’s property,” said Mitchell.
•Agreed to turn in the existing railway repair agreement with Indiana-Louisville Railroad over to newly appointed town attorney John Rothring for his review and interpretation of the town’s obligations.