06-24-02 Utilities Committee - Laserfiche WebLink

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Utilities Committee June 24, 2002 Page 2 these proposed increase are proposed in the middle of a budget year for each of those entities. Mr. Dillon stated that Council Member King's math is correct. He noted that a number of the larger customers will be affected and that many of them have voiced their concern to the City Administration. Dr. Varner questioned whether the City currently has the authority to have a surcharge of up to 150% on users outside of the city limits. Dr. Varner question that if this is correct and the City already has this authority, why was the City not billing properly? Mayor Luecke stated that he believes the City currently has the authority to bill up to 150% for non-city users. Dr. Varner voiced concern about the proposed rates, noting that the City attempted to remove the water works operation away from the jurisdiction of the Indiana Utility Regulatory Commission (IURC). He inquired when the sewer operation became under the sole authority of the City. Mr. John Skomp of Crowe Chizek stated that there are no sewer operations under the jurisdiction of the IURC. Dr. Varner noted that it is difficult for the Common Council to review the proposed rates when the "cost of service study" is proposed by a firm hired by the Administration. He noted that perhaps an independent study should be authorized by the Council, since the Council has the final authority on the rates and must determine if they are"fair and reasonable". The Council may feel compelled to accept the Administration's report. Dr. Varner inquired about how the city should distribute the increases, noting that the CSO comes up every five (5) years and that that was one of the reasons given as to why COIT should be passed. Dr. Varner concluded his remarks by stating that the Council needs much more information before it can entertain a request to increase the rates. The Mayor's July 22nd date may be reasonable, but at this juncture, that date appears to be premature. Assistant City Attorney Aladean DeRose sated that she believes that the 150% surcharge rate may have been authorized in 1975, but she believes that it was never codified. Mr. John Skomp of Crow Chizek stated that an increase in revenues is needed. It has been calculated that$ 19 million in revenues is needed rather than the current$13 million. He noted that the "Cost of Service Study" provides the data for such an increase, and referenced operation/maintenance data,capital improvements addressing combined sewers, and infra-structure repairs. Council Member Kirsits then opened the public portion of the hearing. There was no one present from the public to speak in favor of the proposed Bill. Mr. John Mountsier, President of I/N Tech and I/N Kote, spoke against the Bill. Mr. Mountsier stated that his company would receive a four-fold increase. He questioned why the $13 to $19 million increase is really necessary? He questioned why a new rate structure is necessary? Why is the fifty percent (50%) surcharge necessary? Mr. Mountsier stated that their sewer cost will go from $650,000 to $2.7 million under the proposed Bill. I/N Tech and I/N Kote compete on a global basis, and they cannot absorb this increase nor can they pass it on to their customers and remain competitive.