11-13-02 Utilities Committee - Laserfiche WebLink

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y 4 Page 3 300% proposed by the City. In summary, Mr. Mountsier suggested that there be no surcharge; he questioned the overall size of the proposed increase; voiced concern over the "accounting error" discussed by Mr. Skomp; and suggested that with continued meetings and discussions that a "win/win"for all parties could be pursued. Mr. Terry Miller of the Chamber of Commerce then asked several questions. Mr. Gilot responded that the $1.5 million service overflow was new. Mr. Miller stated that St. Joseph County is involved in a sewer and water district which has not been resolved. He suggested that a community-wide program should be reviewed since the area does not need two groups doing the same thing. He also noted that Elkhart has proposed to take over some sewer work in our county, which is another reason why a community-wide review is necessary. The current debt costs results in "free money to the city". Bonding is a real alternative in this area He urged the City to balance the needs, and noted that the businesses are without any pricing power. He suggested that only Phase I be considered at the present time. Mr. Tim Baker of Holladay Properties noted that his company owns several properties. Normally they would pass on expenses to their tenants, however, the rates suggested will be "virtually impossible to absorb". Mr. Baker suggested that someone "must have been asleep at the switch", for no rate increase to be proposed for 14 years and then such high rates now. He noted that the proposals would result on a strain on the business community. Mr. Robert L. Miller, Sr. Noted that the hotels and motels in the Roseland area and businesses in the former Clay Utilities franchise area are in the process of organizing. He stated that the city may be shooting themselves in the foot if the rate increase ultimately results in the loss the largest customers. Third class cities and towns will compete to provide services to these large customers. He noted that the City of Mishawaka just got one of South Bend's hospitals;and further noted that Mishawaka is delighted with what South Bend is proposing. Many area restaurants are near the breaking point now, and with a substantial rate increase resulting from the 50% surcharge, many will fail. Mr. Miller stated that 12 days between now and the public hearing is not sufficient time to study all of the issues. He noted that Evansville settled at a rate ranging between 15% to 35%. He noted that the Speedway case was different since different rates were in effect for a long period of time prior to the last surcharge. Mr. Miller contended that the 50% surcharge cannot be sustained and that attorneys have been retained to fight it. He noted that the vote by the South Bend Common Council was 9-0,with the issue then being that Roseland did not want to become a part of Clay Utilities. When the lease payments were to be paid in full, they were to be paying the same rate as South Bend residents. Ramada Inn is paying 35% more right now. He noted that a lot has gone wrong. Mr. Miller noted that Clay customers do not need all the services that are listed, and that the majority of those services are a direct result of South Bend's old sewer system. Mr. Miller cautioned that the city will regret the 50% increase; he suggested instead that discussions continue since the current proposal is not ethical or moral. Council President Kelly inquired whether a one-year rate increase with continued discussions on rates thereafter would be doable. Mayor Luecke stated that he believes that the proposed rates are fair and equitable and that one year increases will leave the City short of funds. Dr. Varner inquired about the flow rates and the volume measured and their differences. Mr. Skomp stated that the differences are due to the base charge. Utilities Committee November 13,2002