For the near term, water and sewer rates customers are charged in Crothersville are sufficient to meet needs.
That was the message from Steven K. Brock, a CPA with Therber, Brock & Associates of Indianapolis who are municipal finance advisors.
“Both water and sewer rates are in pretty good shape for now,” Brock told the Crothersville town council at a special meeting on Nov. 25. But within three years, increases in both utilities will be needed, he said.
“You adjust your town budget every year but utilities, which bring in more revenue than property taxes you only look at every 5-6 years which results in steeper increases,” Brock told the council.
Council President Ardell Mitchell acknowledged that past councils have been reluctant to increase utility fees which resulted in higher spikes in rate hikes.
“I think utility users would prefer smaller annual increases to a big jump in rates,” he said.
Sewer rates were last increased in 2005 but have seen those smaller annual increases lately to keep up with inflation and increased operating costs. Water rates, on the other hand, have not.
The last general increase in water rates was in April 2005.
“Your water rates are pretty good for now but with a 2% inflation rate, you will require an increase in revenues within three years,” Brock told the council.
The consultant told the council that they may want to consider three changes to their water rate ordinance in the meantime.
He said local water deposits (the charge for a new water customer to the existing system) and connection fees (charge for an additional customer to the water system) should be increased.
“Crothersville is on the low end of both of these charges when compared with charges in other communities,” Brock said.
Also, the town general fund, which gets its revenue from property taxes, pays the town water utility an annual rent to pay for fire hydrants.
“You may want to look at switching that from a property tax basis to a consumer basis and add a $4 monthly hydrant fee to utility bills,” said the consultant.
Fire hydrants in town not only are used to fight fires but also help to lower homeowner and fire insurance premiums when compared with areas that do not have fire hydrants.
Both water and sewer bills are sent out monthly and are based on water consumption.
Also a part of the monthly utility billing is trash collection which the town learned last month Rumpke of will be increasing its charges by 3%. Currently the town pays Rumpke $9.19 per month for weekly trash collection in town and charges customers $9.50 per month.
With a 3% increse, Rumpke’s charges to the town will be $9.47 leaving only a 3¢ margin for the town.
That extra fee is what the town uses to pay for the twice year large trash pick up.
“We may have top look at increasing trash collection fees in 2015 also to pay for large trash pick,” said Mitchell. He noted a break-even 3% increase would result in local trash charges going to $9.79
However, councilman Lenvel ‘Butch’ Robinson pointed out that the town receives a nearly $5,000 annual stipend from Jackson County Solid Waste to offset the monthly recycling fees.
“That money has been going to the general fund but maybe it should be used to help pay for the large trash pick-up,” Robinson suggested.
Continued discussion on water, sewer and trash fees was expected at last night’s (Dec. 2) regular town council meeting.
