CLOVERDALE --In a meeting that took nearly three hours, the Cloverdale Town Council has finally decided on what it plans to do with the utility rates that have lingered over the council for the past few months.
Cloverdale residents showed up to voice their concerns, although they were heard, the council had no choice but to raise utility rates in hopes of not being taken over by the state.
Paula Walker, of Khron and Associates, spoke to the board on a variety of options that were put together, including one with a food and beverage tax.
"Utilities are called enterprise funds," explained Walker. "They have to make a profit. We've looked at this and we've tried to put this off, but both water and sewer need rate increases. Water and sewer both have debt, sewer has the most debt."
Many residents were angered over the fact that Cloverdale has not been in control of its finances for quite sometime, the theme of the night being "we did not put them in the hole."
The council however decided the best option was to raise the water rate 15 percent along with a flat rate of $60 for wastewater.
Most residents, with a ¾ inch meter, will be charged a rate of $18.16 plus $9.05 per 2,000 gallons used for water. Wastewater will include a $60 flat rate plus a $10 surcharge along with $4.75 per 1,000 gallons used.
"We've gone through projects and hired the correct professionals to help us do what we need to do, explained Walker. "But sewer is going through really hard times and it's in the hole. We're at the point where we have to do something. It's not a choice anymore."
Currently, the town is in violation on its bonds and if the problem is not solved the state will take over. This rate increase comes after several big commercial properties moved out of Cloverdale along with the council not raising rates in the past, when it should have.
Due to being in such a deficit with the sewer rate the option of a flat rate was taken in hopes of fixing the problem quicker.
"I know it's a big bang and your council doesn't want to do this," said Walker. "But we are at the point that we have to do something. This can help us get out of the hole faster than taking five years to do it."
The monthly surcharge of $10 added to the flat rate has the possibility of being lowered or eliminated at the end of 2014, depending on if a food and beverage tax were enacted.
"That's totally insufficient and unacceptable," said Don Gedert. "You are going to break this town. We will have an additional 100 vacant homes."
Gedert along with several residents spoke out on the issue, all stating that the people of Cloverdale do not have enough money, especially those on a fixed income to pay these increased rates.
Town attorney Allan Yackey noted that the Indiana Association of Cities and Towns (IACT) has been attempting to get a food and beverage tax enacted, but has had little luck.
"Jodie Woods said that a statewide restaurant tax has been on their agenda for almost a decade," explained Yackey. "Last year they were told that it was so disfavored they couldn't even find a legislator to introduce it as a bill."
Yackey also noted that Gedert should not halt his efforts, instead move forward in attempting to enact a food and beverage tax in Cloverdale.
"If you go statewide you'll have IACT on your side," said Yackey. "You'll have more problems that way (going statewide). You've just got to go for it."
It was noted by Yackey that it's easier to do a local tax versus a statewide tax. Statewide will involve having a lot of retail and anti-tax people against the food and beverage tax then just asking for Cloverdale to have the option of enacting such a tax.
Food and beverage tax aside, there was nothing the council could do, as there is currently not enough money to work with.
"It's just not here it's everywhere," explained council vice president Dennis Padgett. "Martinsville is having a 40 percent increase. We're going to have to cut some costs. Whatever has to be done, has to be done."
Last time the rates were addressed, council decided to go with the lowest option. It was noted by Walker that over the past few years the utility rates have not been high enough under the conditions.
"This is something that we put off that's going to have to happen," explained Dennis. "We need to try to make as many cuts as we can. It has to be done tonight but I think the council can do better. We're going to have to have a little workshop."
The board was mostly in consensus as they all voted for the flat rate fee and the 15 percent increase. Although, all noted that they wished this did not have to happen.
"I'd give anything if we didn't have to do it," said council member Coweta Patton. "I have to pay the same bills as you do."
This rate increase will hopefully give the town some working capital along with money to pay bond payments.
Although, the council voted on these increases, Yackey will now have to draft the ordinance along with holding a public hearing before the rate increases are officially enacted.