News Column

Anderson City Council approves $1.2 million loan to water utility

June 13, 2014

By Ken de la Bastide, The Herald Bulletin, Anderson, Ind.

June 13--ANDERSON -- The Anderson City Council approved an additional $500,000 loan to the Anderson water utility to bridge the cash-flow gap over the next 18 months until an increase in water rates is approved by the state.

The council Thursday approved the loan through the three required readings.

Last December the council approved a $700,000 loan from the sewer department to the water utility to cover an anticipated cash-flow shortage. Those funds were to be repaid by June 30.

Anderson City Controller Jason Fenwick said Thursday that the water utility is not able to repay the $700,000 to the sewer department by the end of the month. An additional $500,000 is needed until the new water rates are approved by the Indiana Utility Regulatory Commission (IURC), he explained.

City officials expect to file the necessary paperwork with the state next week for the water department to raise rates by 21.18 percent in 2015 and 2016 and to issue $14.3 million in bonds for infrastructure improvements.

The increase will result in the monthly bill for the minimum user of 3,000 gallons or less to climb from $13.36 to $19.62 and the bill for the average user of 5,000 gallons to increase from $18.98 to $27.87.

The council approved the rate increase and the bond by a 5-to-3 vote in March after discussions in several meetings.

Fenwick said Thursday the $1.2 million loan is to be repaid within the next 18 months.

"I wanted some flexibility," he said. "Hopefully, we will be able to repay some of the loan amount early next year."

Electric rates

The council approved through two readings -- three are required -- a new rate schedule and charges for Anderson Light & Power. The changes were approved by the state this year.

Officials with the administration of Mayor Kevin Smith had sought a third reading by the council, but a motion to suspend the rules failed.

Kyle Hupfer, an attorney representing the city, said the IURC approved a three-percent decrease in revenues for the utility, based on the 2012 revenues and expenditures.

He said the state agency approved adjustments to the rate structure so that all utility customers paid their fair share. The state approved a 50 percent change in residential rates, and not a 100 percent adjustment, which would have had a larger impact on residential customers.

Hupfer said until the new rate structure is approved by the council, the electric utility will be overcharging some customers.

The increase approved by the IURC was less than city officials projected in 2013. Originally, residential customers were expected to see a rate increase of $5-$7 monthly or a 7.8 percent hike.

Residential customers using 1,000 kilowatt hours will see an increase of $1.74, or 1.7 percent, per month. Customers using 1,214 kilowatt hours will see no change, and those using 1,500 kilowatt hours will be a decrease of $2.33, or 1.6 percent.

Follow Ken de la Bastide on Twitter @KendelaBastide, or call 640-4863.

Next meeting Anderson City Council will meet at 6 p.m. Tuesday to consider final adoption of new electric rates.


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Source: Herald Bulletin (Anderson, IN)

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