Smaller sewage rate increase of 38.3 percent gets common council approval

A much-discussed sewage rate increase for Huntington utility customers was approved in final form by the Huntington Common Council on Tuesday, Nov. 26.

However, the higher rate - needed to pay for state-mandated improvements to the city's wastewater treatment system - won't be as high as originally proposed.

The new rates, which will be charged beginning with the next billing period, will increase by 38.3 percent. The initial proposal called for a 43.4 percent increase.

Jeff Rowe of Umbaugh, the financial consulting firm that has been guiding the city through the project, said the rate increase is based on the final cost of the project, which dropped after a construction contract was awarded in mid-November at a price lower than the original estimate.

The cost estimate for the project now stands at $15.66 million, Rowe said, about $400,000 less than previously estimated. Of that total, $14.26 million will be funded by bonds that will be repaid with revenue from the sewage rate increase.

The remaining $1.4 million will be paid with money the city has on hand, the result of cost savings on previous phases of the sewage treatment upgrades.

With a 38.3 percent increase in sewage rates, a residential customer using 4,000 gallons of water a month would see the sewage bill go from $32.58 a month to $45.06 a month.

With the 43.4 percent increase originally proposed, that same bill would have increased to $46.72 a month.

City Clerk-Treasurer Christi Scher pointed out that rates are increasing only on the sewage portion of the City Utilities bill, not the water portion or other fees included in the bill.

And, she said, the dollar amount of the increase will be different for every customer.

"You don't know unless you look at everybody's bill how much it will go up," she said.

The 4,000-gallon figure is a standard number used for comparisons, Rowe said.

"We're assuming that's an average usage for a residential customer," he said. "It's dependent on what your usage is, obviously."

Councilman Greg Davis proposed an audit of the utility to confirm the figures the rate study was based on. Rowe responded that the rate study was based on the audit conducted annually by the State Board of Accounts.
Davis joined council members Jim Long and Wayne Powell in voting against the rate increase.

Council members Paul Pike, Jack Slusser, Joe Blomeke and Charles Chapman cast "yes" votes to approve the increase on a 4-3 decision.

The work to be funded by this rate increase will be done in 2014 and will include construction of interceptor sewers leading to a 2.25 million gallon storage tank, where excess water coming in to the sewage treatment plant during heavy rains will be held temporarily until the storm ends and the plant can handle the extra water.

This project, dubbed Rabbit Run Phase I, is part of a 17-year endeavor that began in 2009 and extends through 2026. The total project is broken down into nine separate projects with a total cost of $63 million.

The goal is to keep raw sewage from flowing into the Little River and Flint Creek during times when the sewage treatment plant is overwhelmed by heavy rains.

The Indiana Department of Environmental Management filed a lawsuit against the city of Huntington to force the city to comply with the Clean Water Act.

An agreed judgment reached in 2007 sets out the terms for the city's compliance.

In other business, council members approved an additional appropriation of $60,000 to the Solid Waste Fund to pay for equipment repairs and health insurance costs.

A fund transfer within the Aviation Fund - $3,200 from security equipment to health insurance - was also approved.