CLOVERDALE -- The Cloverdale Town Council got down to business on Tuesday evening, making the final decision regarding a rate increase for water and wastewater utilities.
During the first public hearing of the night, Cloverdale residents were able to voice their concern regarding the upcoming rate increases on water and sewer bills.
Paula Walker from O.W. Krohn & Associates attended the meeting to field questions from unhappy residents.
"In 2008 we all know that this country went into a financial recession. The town has been finding money problems ever since," explained council president Don Sublett. "It's a bad situation. There should have been a rate increase according to the rate analyst here for the town in 2010, that didn't happen. Here it is 2012 and we are facing a rate increase."
The board was visibly not happy with the rate increase itself, but members had little choice but to approve the increase, which will raise rates for residents.
Most residents, with a ¾-inch meter, will be charged a rate of $18.13 plus $9.03 per 2,000 gallons used for water. The average monthly bill for someone using 4,000 gallons will now be $35.38.
Walker provided the council and the audience comparisons of water rates from towns around Indiana. The increase puts Cloverdale in the middle range of towns such as Fillmore whose average water bill is around $43 and Bainbridge whose bill is around $27.
Wastewater will include a $60 flat rate plus a $10 surcharge along with $4.75 per 1,000 gallons used.
The monthly surcharge will expire on Dec. 31, 2014 if Cloverdale is granted authority by the legislature and imposes a 1 percent food and beverage tax on or before that date.
Those with a bigger meter will be charged a higher rate, such as those with a one-inch meter will have a base rate of $150 along with the $10 surcharge and a $4.75 flow rate charge per 1,000 gallons.
This figure however, is a bit higher than the water rate and puts Cloverdale near the top of local comparisons. Towns such as Fillmore have an increased rate of nearly $80, while towns such as Danville pay less than $40 for wastewater.
According to Walker, water and wastewater revenues have declined due to business closings and an overall trend of declining usage. The majority of revenue requirements are fixed costs, such as debt repayment obligations and the fixed costs of water operations.
The audience was not happy and members voiced their opinions that not only will this make it difficult for many residents to pay, but it will deter new business from coming to Cloverdale.
"We can sit back here and act like dummies and have the state take it over," Sublett said. "There are cities and towns that are our neighbors where the state has taken over their utilities, and you'll see what happens to their utilities."
The town has not seen a rate increase since 2006. According to Indiana code the rates must cover expenses, which are currently far greater than revenues the town is bringing in.
At the end of 2011, operating expenses for water totaled $504,211 and wastewater totaled $546,968. Currently, it takes $591,000 to run the water utility and there is only $509,000 coming in. A total of $979,000 is needed for the wastewater utility and only $746,000 is coming in.
"It's not something that anyone wants to do," Walker. said "But it has to be done. On water rates you're right in the middle compared to other towns."
Several residents voiced outrage over the rates not being raised in previous years when the town had been told to do so several times. Residents believed that a rate increase years ago might have helped Cloverdale with the situation it currently finds itself in.
"What was going on is in 2008 we lost Patti (Truax) as the clerk-treasurer. We then picked up a new clerk-treasurer, which was Cathleen Monaco in 2009. She was learning the job and it took her over a year to straighten things out and learn the job. It's a very hard job to learn," council vice president Dennis Padgett said.
"I kept asking her, and so did the board, 'What was going on with the town?' We ran this town for almost three years without knowing where we were at, the money situation or nothing. It's been real hard."
The council at that time was told by O.W. Krohn and Associates that something needed to be done in March 2011 as the town was running thousands of dollars in the hole.
"We tried to get it back without raising the rates," Padgett said. "But it never came back. Three of our big costs are the sewer plant, the town hall and employee insurance. It's taken a toll on us. There are a lot of things going on and we are just trying to deal with it."
The town has also recently instituted a new policy which does not allow residents to be excessively late on their payments or split them up as they have done in the past. This is especially troubling for some with the new increase in rates.
"This utility has to run just like a business," Walker said. "This is a problem we have to deal with."
The board unanimously voted to pass the rate increase, Ordinances 2012-5 and 2012-6, which will go into effect within the next month. It is the hope the surcharge on the wastewater will be reduced once the town is approved to enforce a food and beverage tax.
Following the first public hearing on the rate increases, the board held a second public hearing regarding the budget. Very little was said during the meeting as the council has already made initial approval of the 2013 budget. However, a budget adoption meeting will be conducted Tuesday, Oct. 23.