This graphic shows Edinburgh’s current and proposed rate increases compared to nearby municipal utilities.
A rate increase is on the horizon for customers of Edinburgh’s town water utility.
The rate is set to increase by an average of $10.31 per month for residential customers.
Town officials say the increase is needed to fund a $6.5 million new water plant that will upgrade the 1997-built plant that has been due for an upgrade for more than 5 years.
The total cost of the new plant is $8.1 million, including construction costs, design, engineering and bond financing costs, said Mitchell Eschweiler, of Baker Tilly, the accounting firm hired to perform the rate study.
To lower the total cost of the new plant, the town council plans to use the town’s $956,500 allocation from the American Rescue Plan and a $700,000 grant from the Indiana Office of Rural and Community Affairs. The grant was awarded to the town last year and the council is expected to allocate the ARPA funds at their meeting on March 28.
The remainder of the project is being funded with a State Revolving Fund (SRF) loan of $6.4 million that will be paid off in 2042, said Dan Cartwright, town manager.
Eschweiler proposed several scenarios for the rate increase and advertised the highest possible rate increase scenario for the public hearing set for March 28.
The maximum advertised average increase of $12.02 is likely higher than the town council will ultimately approve, as that figure did not include the ARPA funds. With ARPA funds included the rate would be $10.31 higher for residential customers, on average, Cartwright said.
The original scenarios were an average increase of $12.02, $10.12 and $7.28. With the ARPA funds added, the increases would be several dollars under what was originally proposed, Cartwright said.
The scenarios are based on the average water user at about 4,000 gallons of monthly water usage. These customers currently average about $31 per month for their bill, so they would pay about $41.31 if the council approves the maximum rate increase.
These rates would increase the amount available for operating expenses for the water utility, would make enough money available to meet the requirements of the bond and raise between $1.6 million and $1.8 million for future water infrastructure improvements, Eschweiler said.
Even with the increase, the town’s water rates are lower than comparable utilities. The survey of nearby rates shows Edinburgh’s current rates are lower than all but one community, while the proposed rates would put the rates in the middle of the pack, according to town documents.
While a rate increase isn’t ideal as gas prices and inflation continues to rise, the town’s water is well past its useful life. Right now, the utility pumps thousands into repairs and treating the water with sodium permanganate, Cartwright said.
The new plant will save on repairs it will eliminate the need for sodium permanganate to be added to Edinburgh’s water, Cartwright said. The discoloration that plagued residents in 2020 occurred because the current plant is no longer able to effectively clean iron and manganese because of its old filtration system.
“It was just over a year ago that the whole community was shook up about the brown water,” Cartwright said. “We have been band-aiding our existing water plant for several years. We’ve dug new wells, we have our water tested. Today there’s no problem with our water, but we are band-aiding a very, very old water plant to do that.”
Though an increase isn’t desirable, it is unavoidable, town officials said.
“A $10 increase in today’s world is tough but we are also getting an entirely new water plant that will not have any more rust issues that is going to serve the community for the next 30 years potentially,” said Ryan Piercefield, town council member.
The plant will also up the town’s current capacity from 1.4 million gallons per day to 2.1 million, with the ability to expand to 2.8 million with an additional filter and pump, Bill Jones, Edinburgh’s water superintendent said last year. With current daily water usage at about 700,000 gallons per day, there is plenty of room for commercial, industrial and housing growth, he said.
The old plant, located at 308 N. Walnut St., will remain at the site and be converted to a storage building. The new plant will be built next door and continue to pull the town’s water supply from a groundwater well that is also located on the site, Jones said.
The town council is expected to decide how much to increase rates at their meeting at 6 p.m. on March 28 at the town hall, 107 S. Holland St. The council will hold a public hearing before approving the rates, meaning anyone with questions or concerns about the rates may address the council.
Town officials will close on the bond a few days later on March 31, to lock in the interest rate at a lower rate before the Federal Reserve’s planned interest rate increase the following day.
