By DANIEL SUDDEATH
Daniel.Suddeath@newsandtribune.com
NEW ALBANY — New Albany City Councilman Jack Messer plans on being all ears at tonight’s public hearing over a proposed sewer rate increase.
He wants to hear why the 2006 sewer hike that was supposed to fund the wastewater utility for five years isn’t enough, and how the situation has regressed so quickly.
“A lot of us are working hard to find answers, and we’re hoping that it becomes very informative,” at 6 p.m. tonight, Messer said, when the council’s public hearing begins.
The Sewer Board switched its normal meeting to 4 p.m. tonight to coincide with the council’s hearing. Mayor Doug England, or administration officials, are expected to give a presentation on the finances of the wastewater utility at the sewer meeting.
Council President John Gonder anticipates a packed house for the meeting, though it comes on the same night the New Albany-Floyd County School Corp. board will vote on a number of recommendations including closing schools.
“It’s strange days, we have all these things happening at one time,” he said.
The council is not scheduled to vote tonight on the suggested 36 percent rate increase, which would be coupled with a 19 percent sewer jump in 2012.
“I think people will need time to digest what they’ve heard,” Gonder said.
Messer introduced a 70 percent rate hike last month for first reading, and the measure was defeated. The remaining two votes on a likely amended ordinance could come at the council’s regular March 18 meeting.
But that will depend on the case made by the sewer board and administration for the rate hike, Messer said.
“I think it’s going to depend on the information we get and how the council feels,” he said. “No sense bringing it up if there’s no solution, either up or down.”
Officials have suggested urgency in dealing with the matter, as the city is indebted to bond holders and could jeopardize a compromise offered by the state if action isn’t taken by the end of March.
Background on rate increase
The agency Crowe Horwath, which deals with debt risk among other financial matters, was hired by the sewer board to research the utility’s rates and debt last October.
John Skomp of Crowe Horwath unveiled the agency’s study to the board Jan. 28, and it called for a 70 percent rate hike. The increase was needed, according to the report, for the utility to raise enough funds to satisfy its debt obligations.
The Indiana Finance Authority through the State Revolving Loan Fund program controls most of New Albany’s debt. In February, the state agreed to refinance some of the city’s loans while approving a $7.4 million low-interest loan for the utility.
If the city council agrees to the state’s proposal, New Albany customers — including Floyd County residents that tap-in to the city’s system — would see a 36 percent rate increase this year.
Rates would go up again in 2012 by 19 percent, followed by a three percent annual increase in 2013, 2014, 2015 and 2016.
That option was approved by the sewer board, which had also OK’d the 70 percent increase before the state offered to refinance a portion of the city’s wastewater debt.
But that rate structure wasn’t what the council voted on when it took a first ballot on a sewer increase Feb. 18.
The ordinance presented to the council asked for a 70 percent increase, but Councilman Jack Messer refused to amend it and the measure was defeated 7-0. Council members Kevin Zurschmiede and Diane McCartin-Benedetti were absent.
Tonight’s public hearing is required by the state in order for the council to pass a rate increase. Unless its tabled, the ordinance will have two more readings.
