CLARKSVILLE —
A change in the way Clarksville residents pay for fire hydrants might be a losing proposition for rate-payers if it’s approved as presented.
Right now, the town pays about $188,853 per year for maintenance and water to its hydrants, according to figures from the Clarksville Clerk-Treasurer’s Office. That amount is paid by town government with property tax dollars on a monthly basis.
In a proposal under consideration by regulators, Indiana American Water wants to collect money for hydrants directly from rate-payers — not the town government — in the form a $4.10 fee on monthly water bills. It’s part of a larger rate-increase request.
The company wants a boost — if approved by the Indiana Utility Regulatory Commission as requested — that would increase the typical residential monthly bill for customers in Jeffersonville and New Albany by 6.19 percent. The proposed increase for Clarksville customers is 17.23 percent.
The 2010 U.S. Census indicates there are 9,839 households in Clarksville, meaning the change would amount to about $484,000 in revenue from the hydrants from residential customers alone — about a 150 percent increase compared to what’s being taken in now.
Gary VerDouw, eastern division director of rates for the company, said revenues are based on the number of meters, not the Census Bureau’s count of households. The number of meters was requested but wasn’t available by press time. He also said the amount being paid by apartment dwellers and businesses may be another variable, depending on the type of metering system that’s in place.
The hydrant fee being proposed is based on a study that examines how much it costs to deliver the service, VerDouw said.
Indiana American Water proposed the change for Clarksville and eight other municipalities in Indiana that pay for hydrant fees with property taxes. The company owns the hydrants and handles all their painting, flushing, maintenance and water delivery.
Leaders in Clarksville or the other municipalities could contact the water company and have them alter the proposal, VerDouw said.
“We’re trying to standardize our rates,” he said.
Nearly every municipality that the company serves — including Jeffersonville and New Albany — has the hydrant fee collected directly from rate-payers. Their rates would increase under the proposal as well.
Right now, they pay a fee of $3.80, which would go up to $4.10.
Clarksville Town council president Greg Isgrigg said no decision has been made on whether the town would protest the change.
“We need to discuss it,” he said, indicating that a work session on the topic may be on the horizon.
He said caution needs to be taken to make sure the water company isn’t upping the rate on residents too much. However, taking that amount out of the Clarksville Fire Department’s budget would be a welcome change because it could be used elsewhere.
“You gotta make sure you do what’s right,” he said.
“We’re going to have to pay it one way or another,” said Tom DeArk, a Clarksville resident who noticed the insert in his bill regarding the change. “I just hate to see it go on the water bill because I’m sure our tax bill won’t go down a commensurate amount.”
Seymour, Shelbyville and Summitville are among other communities weighing the decision. VerDouw wasn’t sure if any have opted out of the proposal.
The average Clarksville water customers could see their water bill increase by about $6 per month if the rate adjustment is approved. Other customers could see a jump of about $2.40 monthly.
In making the case for the increase, the company has cited ongoing infrastructure investments, rising expenses related to water treatment and delivery systems and increased operating costs. The company will have invested more than $115 million statewide to enhance its water infrastructure between June 30, 2009 and June 30, 2011, according to a press release it issued when submitting its proposal to regulators in early May.
Rates will not change until the IURC completes a review. The regulatory process normally takes about a year, with the state’s Office of the Utility Consumer Counselor acting on behalf of rate-payers. Public hearings and opportunities for public comment are part of the process, under the direction of the IURC.
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