Columbus Utility Service Board members learned more Thursday about a proposed three-tiered increase for city water rates.
The average residential customer who uses 4,000 gallons a month who now pays $9.82 will eventually see an $8.15 increase phased in over a three-year period, utilities Executive Director Scott Dompke told the board Thursday.
Customers using 15,000 gallons a month would pay an additional $2.64 a month in the first tier. The rate would go up to $3.09 in the second tier, and rise to $3.28 in the third tier, according to charts used in the presentation.
At this time, it’s anticipated the first phase will go into effect on Aug. 1, 2021. The next phase would begin Jan. 1, 2023 and the third phase would kick in on Jan. 1, 2024, the utilities director said.
If approved, the rate increase would be the first for Columbus City Utilities since 1992. As a result, last year’s budget was almost the same as it was 24 years ago, Dompke said. While revenue has fallen about 12% since the early 2000s, the city’s population has increased by 50%, and the increase in expenses has been almost on par with the consumer price index since 1995, he said.
There is a process that the utilities must follow to have the rate increase approved.
The issue will be discussed by the Utility Service Board meeting on July 17, before the board takes a vote on the proposal, Dompke said. If approved, it will next go before the Columbus City Council. If approved by the council, a rate petition could be filed with the Indiana Utility Regulatory Commission around mid-August.
If the commission approves the rate increase, the rate increase could take effect around August 2021.
In most cases where the state commission approves an increase, the rate hike is less than what was originally requested. And if the proposed increase is approved in its entirety, Dompke said Columbus would still be paying less that the average Indiana water bill of $28.89 per month.
Currently, the Columbus City Utility’s budget (both water and sewage) is $23 million, providing service to 19,000 customers on a daily basis.
“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.”
There are several reasons the rate increase is need, he said. For example, 88 miles of very old pipes — most over 100 years old — are still being used in the community, and must eventually be replaced, he said.
The utility will be targeting $11 to $13 million in replacement projects every five years, Dompke said. A total of 33 projects that will collectively cost more than $50 million will take place over the next 20 years, he said.
When Dompke brought up needed improvements for the wastewater treatment plant, he spoke about his department’s responsibility for environmental stewardship.
Dompke quoted a federal study that states for every dollar spent on water infrastructure, $2.62 cents is generated in the private economy. And for every job added through waterworks, about 3.68 jobs are added, he said.
Projects brought up in the presentation before the Utility Service Board include:
Two mid wells under construction in the south well field, as well as plans to construct additional wells.
A wastewater centrifuge now under construction at the treatment plant.
A water main replacement on Ninth Street, between Franklin and Lafayette.
A water main replacement on Eighth Street, from Lafayette Avenue to Cottage Avenue.
Eliminating contaminates from three different wells.
Increase water for fighting fires in older parts of the city.
Taking pro-active steps to lower the number of equipment breakdowns.
Adding raw storage tanks.
There is also a long-term plan that includes replacing and extending the Fourth Street water main to California Street before it becomes a new section of the Streetscape project, Dompke said.
Service board members were told that there is a two-year delay in bonding $22 million of projects, it would increase the cost to $1.5 million, while a three-year delay would cost an additional $4 million, he said.
During the 45-minute presentation, the utilities director brought up the need to accommodate outside interests. That would include providing water to Southwestern Bartholomew Water Corp., which now pays 84 cents per thousand gallons. The city utilities also provide backup supplies for Eastern Bartholomew County Water Corp. for $1.55 per thousand gallons.
Other outside interests might ask the utility to move water lines to accommodate road projects. In addition, the utilities must reserve funding to accommodate new housing projects that put demands on the utility with short notice, he said.
At least three different times, Dompke spoke about valuable role quality infrastructure plays in economic development.
“We want to be able to accommodate growth and development so that Columbus continues to grow, and attract additional jobs,” Dompke said.
