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April 10, 2014

New Albany sewers digging out of debt

Utility likely to again return $570k EDIT pledge

NEW ALBANY — Since the New Albany Sewer Board and City Council agreed to raise rates in 2010, the city has reduced its debt for the utility by about $20 million.

Sewer board member Ed Wilkinson said during a Thursday meeting that financial reports have indicated the utility’s debt has decreased from $75 million to about $55 million over the past four years.

“We have no indicators in sight for two, three or four years, of rate increases or anything,” Wilkinson said.

The discussion occurred as sewer board members are set to consider whether the utility will need a $570,000 Economic Development Income Tax pledge this year.

In November, the sewer board relinquished $810,000 in subsidies including the $570,000 EDIT pledge for 2013, as officials said the utility was sound and didn’t need the aid.

Council members questioned Shane Gibson, an attorney with the city, earlier this week about whether the EDIT pledge would be needed this year.

The board will likely vote on whether or not to relinquish the EDIT subsidy on April 24. Mayor Jeff Gahan, who is the sewer board president, said it appears those EDIT funds will likely stay with the council again this year.

“Right now, it appears that things are headed in that direction,” Gahan said after Thursday’s board meeting.

“I think it would be the responsible thing to do to relinquish that and put the funds back in city council oversight.”

The EDIT subsidy was mandated to remain in effect about four years ago with the State Revolving Loan Fund program approved New Albany for a $7 million loan for capital improvement projects.

SRF officials had to OK the removal of the subsidy before the sewer board could take out the pledge, which both did last year. Gibson said SRF required the city to commit to a rate study in 2015 as part of the deal, and that the sewer board agreed to review the subsidy each year.

Wilkinson said the utility is paying off debt at a pace of $5 million a year while completing substantial improvement projects for the city.

On Monday, the council approved on final reading an ordinance establishing New Albany’s sewer department as the lead wastewater utility within four miles of the city’s boundary.

That means if a new development needs to tap-in to sewer lines within the city’s jurisdiction, New Albany will have first priority to offer service.

Gahan said Thursday that the council’s decision keeps the city out of a political showdown with other government entities or sewer companies in the future, as the boundaries have now been set and agreed upon by Georgetown.

“We were just trying to look out for the rate payers,” Gahan said.

 

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