Columbus City Utilities plan to seek a water rate increase to fund operations, maintenance, upgrading of aging infrastructure and for capital project needs.
Utilities Executive Director Scott Dompke said Thursday the city water department is facing significant challenges with a need to replace outdated water mains, constructing new wells and other infrastructure needs.
Exact figures as to the potential monthly increase in water charges for the average city customer will not be available until the utilities department presents its case at a special city council meeting on July 9, he said.
According to a comparative study by the Accelerate Indiana Municipalities, the average monthly rate for 4,000 gallons of water from a utility in Indiana is $28.89, whereas the current monthly rate for Columbus customers is $9.82.
Because there is a tiered rate structure for different levels of water usage, not every customer will see the same level increase across the board, he said.
Without a water rate increase, the city will likely face more problems with its water infrastructure, Dompke told city utilities board members on Thursday at a meeting at Columbus City Hall.
“We’ll end up spending more money on emergency repairs and less on preventative maintenance,” he said. He also noted that maintenance is a means of reducing “the long-term costs of operation” and that the more projects are delayed, the more they end up costing.
“This has been in the works for many years,” Dompke said. “And while the timing is less than ideal, it is something we cannot avoid any longer.”
Since Columbus’s last water rate increase in 1992, the city’s population has increased by 50%, the city utilities director said. The water utility has seen a 12% decrease in revenue since 1995 while at the same time seeing a 26% increase in operating expenses over that same time period.
According to Dompke, projects that would be funded by the rate increase include:
- A 20-year water main replacement program
- Building new wells (two are currently under construction, four are scheduled to be built in 2022, and one collector well is proposed to be installed around 2026)
- Adding raw storage tanks
“The drivers for this rate increase are 86% capital driven,” he said of the rate increase request. The other 14% is for a need for operating expenses.
“The capital required, associated with this rate case, is $31 million,” Dompke said. “ (Of that) $22 million will come from bonds, and $5 million of that will come through the rates. We’ll target about $1.7 million a year through the rates.”
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The Columbus City Council is scheduled to hear a proposal for a water rate increase for the city utilities at a special meeting on July 9.
If the city council approves the rate case, it would be sent to the Indiana Utility Regulatory Commission in mid-August. If the commission approves the rate increase, it could take effect around August 2021.
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