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November 23, 2012

Sellersburg's water rates could double

Council president says improvements are essential; vote not expected Monday

SELLERSBURG — A water utility improvement project could raise monthly rates for Sellersburg residents by nearly 100 percent.

The town has considered seeking a $5 million bond to complete improvements to the town’s water-treatment plant; drilling for two new supply wells; construction of a new booster station; a new 500,000-gallon water storage tank; and to refurbish two of its existing water tanks.

At a Nov. 12 town council meeting, Indianapolis-based Umbaugh and Associates presented a water rate study to determine how much it would cost the town to issue the bonds before the council granted its approval. Two plans were presented by Umbaugh, requiring revenues of $1.77 million to $1.83 million annually to cover the bond payments.

For residents, the required revenues would raise monthly rates to $26.24, compared to $13.25 based on 5,000 gallons of water usage. In Umbaugh’s second alternative, the rate would increase by 104 percent, to $27 per 5,000 gallons of water usage.

Sellersburg Town Council President Paul Rhodes the major difference in the two options is a $58,400 payment in lieu of taxes in the second alternative, as well as minor differences in the public fire protection surcharge.

According to Umbaugh’s draft rate study, the hydrant charge — per equivalent meter size — in alternative one totals $5.22 per month, or in alternative two $5.37 per month.

“We’re going to move forward with one of them, we don’t know which one yet,” Rhodes said of the options Umbaugh presented.

He added that the council also has not eliminated the possibility that it might explore a blend of the two alternatives to come up with a water utility improvement plan. Rhodes said improvements need to be made to the town’s water system and the last time upgrades were made to the system was in 1991.

“Something has to be done with the water system,” he said. “We can’t ignore it any longer.”

Rhodes said concerns offered by the council at its last meeting centered around being able to meet the debt payments and being able to secure long-term water system improvements. By approving the upgrades and securing the bond, the hope is that it will provide water security to Sellersburg for the next 10 to 15 years, but he added it will depend on a lot of factors.

“We have concerns about any raise [in rates] we have,” Rhodes said. “But it comes to a point when we have to do something with our service or we won’t be able to provide service to others.”

The town sells some of its water to outside sources.

He clarified the work to the water system does not include any expansion of service, solely upgrades to the water system for its existing customers.

“It’s higher than what they’re paying now, so I’m sure there are people that won’t be happy with it,” he said of the proposed rate increase.

Rhodes pointed to a chart included in the draft study that Sellersburg water customers will be in the middle of the pack for cost of water rates compared to other area municipalities.

The change in monthly water utility rates would move Sellersburg from the lowest cost for area municipalities to just below Indiana-American water customers, which includes Jeffersonville, Clarksville and New Albany. Indiana-American water rates, based on 5,000 gallons of consumption, total $35.75 monthly.

No decision was made by the council to approve seeking the bonds, and a vote is not expected to be made at the council’s next meeting Monday, Nov. 26.

In addition to seeking answers to questions the council still has, the town is in the process of redoing the town’s water ordinance, Rhodes said. He said the council won’t take a vote on approving the bonds Monday, but the bond ordinance may be introduced.

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