Council Hears Utility Hikes May Come

Utility rate hikes might be down the road, the Warsaw Common Council heard in one of three reports before it Monday.
The reports included the Wastewater Utility 2015 Financial Management Report, the Stormwater Utility 2015 Financial Management Report and the 2015 Redevelopment Commission Report.
The wastewater report is a six-month report prepared by Umbaugh & Associates, Mishawaka.
“The bottom line is, is the rate sufficient to support the utility? And in this case it is, but there are some notes that the city, through its (inflow and infiltration) study, there will be plant system improvements come along potentially next year and at that point we may have to consider increasing rates. We haven’t had a rate increase since 2008. The utility has not required one,” Mayor Joe Thallemer told the council.
The rate sufficiency for what the city is doing now is adequate, he said, but in 2017 significant projects may need to be done, including increasing capacity.
Part of the wastewater report on rate sufficiency states, “… we conclude that the current schedule of rates and charges is adequate to generate revenues sufficient to pay the anticipated costs … However, current rates and charges are inadequate to pay for all of the planned capital improvements over the next five years. The city is planning an improvement project to address needed improvements at the treatment plant in 2017, estimated in the amount of $6,420,000. In order to support the estimated debt service associated with the project, we estimate the utility’s rates and charges will need to increase by approximately 10 percent.”
The report also notes that in 2017, the city will undergo a project to address inflow and infiltration issues in the collection system, with an exact cost currently unknown. The city also is facing a possible wastewater treatment plant expansion project anticipated to occur toward the end of the five-year forecasted period, but that project goes beyond the scope of the report.
On the stormwater utility report, Thallemer told the council, “When we established the rate, we probably got one of the lowest rates in the state for stormwater. It’s $2.95 a month. And being a new utility, there are a lot of projects that need to be done, and we can see that there’s not a sufficient amount of money to do it.”
The report states, in part, “The current cash position of the Stormwater Utility is inadequate to meet the recommended minimum fund balance reserves of the utility. Based on the Stormwater Utility Budget Guidelines 2015, the present rates and charges adopted on May 5, 2014, are sufficient to support the projected operating disbursements, but are insufficient to pay for the projected capital over the next five years.”
The report also states that to the extent the Cumulative Capital Development Fund or other revenue sources are not used to pay for a portion of the capital projects, the current stormwater rate structure “would be inadequate to cover capital projects at the projected level.” Umbaugh estimates the utility will lose $556,500 over the forecasted period, based on the assumptions used in the report.
“In order to offset this shortfall, the city would need to increase rates approximately 21 percent, utilize alternative revenue sources or reduce or delay the five-year capital budget,” the report states.
Thallemer said, “That’s not something we’re proposing right now, but as these projects come around, and as these projects – they can be funded through CCD, which we have done in the past, which we will continue to do – but to take them out of the CCD, they probably will require a rate adjustment. But I think the thing that we want to do is get some projects going so that we can show the importance of this utility.”
The Redevelopment Commission report statutorily has to be prepared and sent to the state. City Planner Jeremy Skinner told the council he had to present it to them before April 15 or so.
“It has everything we the Redevelopment Commission did in 2015. It has the money that was spent, has the bonds, their obligations, the payments and maturity dates and the outstanding debt on those bonds. It has all the money that we spent and where it was spent as far as categorywise. And it also has attached to it all the property lists for each TIF district and has all their AV and all that. So pretty comprehensive in terms of all the information that is given to you,” Skinner said.
The report also was presented to the Redevelopment Commission at its 4 p.m. meeting Monday, with the Common Council meeting at 5 p.m.
Thallemer later told the council that he called Norfolk & Southern about the Ranch Road crossing.
“That’s just been a nightmare of an issue,” he said. “That project has been turned over to the appropriate people, I’ve been told. So I will continue to badger them and keep you all up to date. The down side to that is, they can come in and close the road and they don’t even have to tell us. That’s what they did the first time. But that crossing is in horrible shape as far as I’m concerned and I’m going to let them know that. Hopefully, they’ll get it done soon.”
Council President Mike Klondaris reported NIPSCO has repaired some of the downtown street lights that he had mentioned at the last council meeting. Councilwoman Cindy Dobbins said it was “much appreciated” at First Friday.
“I just think we needed to rattle them and I was glad they did that,” Thallemer said.
In other business, the council approved:
• Ordinance 2016-03-01 on second reading for an additional appropriation of $110,000 from the Certified Tech Park fund. The additional appropriation will be sent to the Indiana Department of Local Government Finance and approved in about a week.
• Ordinance 2016-03-02 transferring $55,000 from capital projects to other services for the Certified Tech Park.
• Resolution 2016-04-01, which puts reimbursed grant money totaling $23,755.69 for the East Market Street project back into the Economic Development Income Tax fund from which the city originally spent it.