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Cloverdale looks to food and beverage tax to fix utility rates

Friday, August 31, 2012

CLOVERDALE -- The Cloverdale Town Council recently held a special meeting to discuss the issues relating to the upcoming change in utility rates.

In a recent utility rate study done by O.W. Krohn & Associates, the town found that it has little choice but to do something drastic to keep itself from going deeper in the hole as Cloverdale is currently at nearly $3.3 million in wastewater debt.

"Basically all the people are leaving town for one reason or another," explained clerk treasurer Cheryl Galloway. "The sewer and water bills don't go down just because people leave. We are now in the quandary of how do we pay for this."

The recent utility rate study showed that the town has also lost 20 percent of its water sales due to the closing of Econo Lodge, as well as various other commercial properties.

Buzz Krohn presented the board once again with a variety of options to help alleviate the financial strain, as the town must bring in a minimum of $904,000 to maintain a coverage ratio of 125 percent. This ratio is to cover the bonds in case of a default. The town is currently bringing in around $745,000 per year.

"We're in the hole right now with the wastewater utility," said Krohn. "We need something more than that minimum to get out of that hole."

Krohn presented the board with such options as a flat rate increase for all residents and commercial properties as well as an increase based on usage.

However, the council has decided to go with a suggestion made by Don Gedert of attempting to create a food and beverage tax.

"Instead of raising rates really high we are going to start adding a surcharge on bills," explained Galloway. "This is a temporary surcharge until the food and beverage tax kicks in."

This new food and beverage tax must go though legislation before the town of Cloverdale can do anything with it. Towns such as Shipshewana have already enacted such a tax.

"The food and beverage tax targets this very problem," said Gedert. "Give me a chance to get the state law equalized for everybody in Indiana so not just us, but anyone can have a food and beverage tax. We need to equalize the playing field."

Gedert plans on putting pressure on state legislators after the election, if successful the food and beverage tax would go into effect as soon as July.

This new tax would help pay for the town's sewer and water bills by charging a certain percentage on all food and drinks bought at such places as fast food restaurants and bars.

"We are not getting enough money from those coming off the interstate," said Gedert. "This tax should generate enough to cover our shortfall."

The town has yet to decide what the surcharge will be for the time being. However, Krohn will soon return to the board with new figures, which will then lead to a public hearing before anything is made official.

There were several issues besides the town's finances including the issue of the town's police cars. Council members discussed such issues as gas and mileage on the cars as well as receiving monthly reports from Town Marshal Jon Chadd. The council plans on discussing such issues with Chadd during next month's meeting.

Utility Manager Rich Saucerman also spoke to the council about Rockville renting a rock box from the town. The council agreed to do so for a rate of $500 a month of $25 a day.

It is expected that Rockville will rent the rock box for a total of one month.

Town Attorney Allan Yackey touched on the issue of parking ordinances one again as the town continues to put greater restrictions on parking, especially along U.S. 231.

The town decided that it will update its ordinances utilizing a previous ordinance that has done by another local town, such as Spencer, while making slight changes, which relate to Cloverdale.

"You can't enforce parking ordinances unless there's signs," explained Yackey. "I haven't seen any signs."

The town will soon also be making sure that all signs throughout the town are included in the new ordinance.

The next Cloverdale town council meeting will be held on Tuesday, Sept. 11 at 7 p.m.

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What a different tone the Town meetings are taking these days! So positive and solution-oriented.

The Food and Beverage tax makes sense for Cloverdale. The town has nearly as many fast food establishments as Greencastle.

-- Posted by sassylass on Fri, Aug 31, 2012, at 11:03 AM

Pull the tax collected by Convention and Visitors Bureau from hotels,motels inside Cloverdale corporate limits and apply that money also.....

-- Posted by kubotafan on Fri, Aug 31, 2012, at 12:28 PM

There's the ole handshake. Hold hand upwards and say gimme, gimme, gimme

-- Posted by muscleman on Sat, Sep 1, 2012, at 9:24 PM

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