JEFFERSONVILLE — The Jeffersonville Sewer Board may adjust its plan after an ordinance that included rate increases for out-of-city users failed to garner approval because it would have also raised capacity fees on new developments.
The Jeffersonville City Council voted 6-3 on first and second readings against the ordinance Tuesday. It calls for wastewater rates for customers outside of Jeffersonville to be increased, primarily affecting Utica and portions of Charlestown.
Len Ashack, director of the city’s sewer department, said previously the rate increases would affect about 990 customers. The additional funding is needed to foot infrastructure projects and to provide capacity to serve customers outside of the city limits.
The utility had a required rate study conducted and the increases were based on that information. Sewer officials said it would amount to about a 14.7% increase for the affected users.
“For years, the City of Jeffersonville charged 50% more for people who lived outside the City of Jeffersonville until the state stepped in a few years ago and said if you’re going to do that, you have to have a study,” said sewer board member Dale Orem.
Customers with metered consumption are now charged $13.43 monthly for the first 7,480 gallons of use and $12.51 for the next 74,800 gallons. Those amounts would change under the proposed ordinance to $15.38 and $14.32 respectively for out-of-city users.
The minimum monthly charge for metered customers would rise from $34.87 to $39.93 under the proposals. Those rates will apply to any existing structure that’s connected to Jeffersonville’s wastewater system whether the building is occupied or vacant.
Single-family residential users on unmetered systems would see monthly charges rise from $72.76 to $83.32.
While one resident did write a letter to the council questioning the proposed rate changes, it was the portion of the ordinance calling for increases in capacity fees that drew criticism from council members.
Developers would pay a $5,600 capacity fee per economic dwelling unit, or EDU, which equates to a single-family residential connection, for service outside city limits. The inside Jeffersonville rate is $4,900.
The current rate is $3,300 per EDU.
Non-residential developments will see a capacity fee based on average daily flow.
Councilman Dustin Croft said charging developers more will eventually cost Jeffersonville residents a higher price in some form.
“That’s just going to trickle down and get paid for by the taxpayer or the homebuyers,” he said.
Croft was joined by council members Dustin White, Bill Burns, Steve Webb, Scottie Mapples and Matt Owen in voting against the ordinance. They offered similar reasoning for their votes.
“Much more discussion needs to be had for me to get behind something of that nature,” White said of the capacity tap-in fees.
Such fees are typically charged due to increased demand on infrastructure when new developments like houses or commercial buildings tap in to the sewer system. They are usually held to pay for improvements and expansions in the wastewater system.
The ordinance as written calls for the changes to go into effect on April 1, if approved, and the increases in capacity fees wouldn’t affect any development that’s already been OK’d by the city. For example, Ashack said multiple subdivisions planned for Jeffersonville that are nearing construction or are in the early phases of work wouldn’t be affected by the changes.
He also emphasized that the fees are needed to ensure Jeffersonville has the capacity needed for future developments, basically allowing new users to pay their way for the added costs it will require to bring them online.
Mayor Mike Moore is the president of the sewer board. He said Wednesday he was surprised by the council’s vote and that he spoke to a few of the members individually after the meeting about the issue.
Moore said the lack of increasing capacity fees could threaten economic development projects.
“Basically I just reiterated our north plant is at 75% capacity and River Ridge [Commerce Center] is at 20% occupancy, so therefore, what they just voted to do was to tell any new business or large residential development it probably needed to go somewhere else,” he said.
“When you’re at 75% and you’re trying to land a big fish at River Ridge, that’s something that a lot of companies are going to be paying attention to.”
Some council members suggested they would be open to a phased approach where the capacity fees are increased over a few years. Moore said the sewer board will likely consider such a plan when it convenes Thursday.
In terms of the rate increases, Moore said he doesn’t support annexing the new subdivisions he believes will be coming to what is now mostly farm land near Salem Noble Road. Instead of those potential residents paying more in taxes by being residents of the city, they’re being asked to foot more for sewer service, Moore said.
“This is great for the City of Jeffersonville. We are going to continue to grow. We’re creating more jobs. We’re creating more residential and we’re having the new developments paying for the capacity for us to continue to grow,” Moore said. “This is the only way that we could continue to grow without placing a burden on Jeffersonville residents that currently live here.”