During Tuesday’s regular meeting, the Huntingburg Common Council introduced an ordinance to increase the rates for water customers.
Financial advisor Buzz Krohn explained that two factors have impacted the need for the rate increase.
First, the Patoka Regional Water and Sewer District has a planned increase in rates for all of its customers as they deal with rising costs for supplies and other materials as well as undertake an $8 million update and expansion project. That increase is set to take effect in January. The city purchases about 40 percent of its water from the district as part of a long-term contract.
To accommodate rate changes and usage increases on a quarterly basis, the city has a rate tracker that adjusts as needed. That tracker has been 35 cents per 1,000 gallons, however, with the recent base increase, the tracker is not enough to cover the increased cost to the city.
Krohn recommended the council approve a 15 cent increase per 1,000 gallons to the tracker to accommodate Patoka’s increase in their rate.
To have the ability to bond for capital projects or cover the costs to maintain current infrastructure, the water utility has an allowance for $400,000 built into its budget. Krohn pointed out that with the current bond for the recent nearly $8 million expansion and the rising operation costs associated with inflation and supply costs, the water utility would not be able to maintain that $400,000 allowance if it only raised the tracker rate.
He recommended the city consider a six percent increase in water rates to the customers on top of the tracker increase.
Krohn stated that the average Huntingburg customer uses a little less than 4,000 gallons a month. With the increase, their bills would increase about $5.51 cents a month.
Here is a range of how the increases will impact different customers based on the volume of their usage. The WCATF rate is the increased amount based on the 15 cent tracker increase.
Councilman Steve McPherron noted that regardless of the form the increases take, the city needs to bump the rates by about seven percent to ensure it could meet the needs of its customers.
Patoka Regional Sewer plans on increasing rates in January so the city plans on considering this ordnance for final approval at the December 13 meeting at 5:30 p.m. in the Council Chamber at Huntingburg City Hall. If passed, customers will see the rate increase on their February 2023 bills.