Sewer bill set to increase 25%

BROWNSTOWN

A change in Brownstown’s recycling container recently resulted in a slight increase in residents’ sewer bills.

Sometime later this year, residents will see another uptick to help the town be able to fund sewer system-related improvements.

The expected jump in both the monthly base rate and flow charge is 25 percent.

For example, the average monthly bill for a 4,000-gallon meter user inside town would rise from $43.35 to $54.19, and an unmetered user would go from $46.07 to $57.59. Outside town, a metered user’s bill would go from $65.02 to $81.28, while an unmetered user would go from $69.07 to $86.34.

Town attorney Rodney Farrow is in the process of putting together the sewer rate increase ordinance, which will be up for first reading at the next Brownstown Town Council meeting at 5:30 p.m. July 18 at town hall.

The second reading and a public hearing are set for the same time and location Aug. 1, and the final reading and possible adoption will be during the Aug. 15 council meeting.

Andrew Lanam with Reedy Financial Group in Seymour said the 25 percent rate increase was determined from three things:

The town needing to provide matching funding if it’s successful in obtaining a sewer system rehabilitation grant

Receiving a list of capital replacement projects coming within the next 10 years, compiled by Scott Hunsucker, superintendent of Brownstown Wastewater Utility

An ongoing review of rates and charges of the utility to ensure sufficient revenue is coming in to maintain debt compliance for the parties that currently hold the town bonds

“What we find, probably to no one’s surprise, is we’ve got some need to increase sewer rates and charges to make all of this stuff happen,” Lanam said. “If we don’t periodically adjust rates and charges, then, ultimately, we’ll find ourselves digging into a hole or we won’t be maintaining the system like we should. Maintaining the system like we should means spending large amounts of money on capital, typically.”

The town is supposed to learn July 21 if it is the recipient of a $450,000 grant through the Indiana Office of Community and Rural Affairs to address high-priority sewer line and manhole issues in town. If it receives the grant, a $300,000 match would be required. If the town is unsuccessful, it can reapply for the grant in the fall.

Hunsucker provided Lanam with a master plan of capital improvement projects he expects will need to be done in the next three to 10 years. That includes upgrades of two lift stations combining for $2.1 million and collection system upgrades totaling $2.6 million.

“Some of those would be paid for with your ongoing extensions and replacements that you could turn out over a period of time,” Lanam said. “Others are going to be of a nature that it doesn’t make sense to be able to do that over a longer period of time, so you’re probably going to have to issue some more debt at some point to be able to fund these.”

Looking at the sewer rates and charges involves several steps, with one being reviewing the historical cash balances, revenues and expenditures of the utility. That includes looking at data from the test year, which is 2015, and comparing the revenues and expenses to previous years.

Lanam also looked at the debt service coverage calculation, which is one requirement the utility has for its bondholder. In 2015, the utility was at 116 percent, which is below the required coverage percentage of 125 percent.

“Really, you’re going to be hampered doing any major repairs and maintenance in the future or staying on top of your plan because of existing bond requirements,” Lanam said.

Whether or not the town receives the sewer system rehabilitation grant, Lanam said it likely will need a bond.

“Besides streets, (sewer systems) are the most capital-intensive things that you can possibly do in government,” he said. “Systems that operate without debt don’t do it for very long, and they typically will get themselves in a bind where you have major overhauls to systems.”

Also, the longer major projects are pushed off, the more expensive they will be in the future, Lanam said.

Farrow said he would work with Barnes and Thornburg in Indianapolis to get a bond ordinance drafted.

Council president John Nolting said it has been nearly five years since the last sewer rate increase.

In the past four years, the utility’s customer count had a high of 1,191 in 2013 and dropped to 1,085 in 2015.

“You’re not growing by leaps and bounds, and the cost of treating sewage is not going down, so when you have those sorts of things blowing toward you, you’re going to have to consider a rate increase periodically,” Lanam said.

At the end of June, sewer bills increased for town residents because the council decided to go from a recycling bin to a recycling cart. Residents still use their brown 95-gallon carts for trash, but their red recycling bins were replaced by green carts similar to the size of the trash carts.

The monthly charge for trash and recycling is $12.55 — $9.05 for trash and $3.50 for recycling. Residents had been paying $11.35. The charges are listed as a line item on their sewer bill.

Town officials said they expect the 25 percent rate increase to go into effect sometime in the fall or early winter.

By the numbers

Brownstown Town Council members are considering a rate increase to help pay for sewer system-related improvements. The present and proposed bills for a customer using a 4,000 gallons a month would be:

Type of service;Present rate;Proposed rate

In town metered;$43.35;$54.19

In town unmetered;$46.07;$57.59

Outside town metered;$65.02;$81.28

Outside town unmetered;$69.07;$86.34

Author photo
Zach Spicer is a reporter for The (Seymour) Tribune. He can be reached at zspicer@tribtown.com or 812-523-7080.