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REGULAR MEETING
<br />JANUARY 23, 2017
<br />Mr. Schmidt stated, As with anything, whenever we conduct a study, we reach out to our
<br />financial advisers. In this case, it was Umbaugh and Associates. They look at our complete
<br />system, they look at our revenues, they look at our operating expenses, they look at the number
<br />of customers, and they figure out where the rates need to sit.
<br />Councilmember Dr. Varner asked, Did they examine statutory authority as a basis, going
<br />forward, for their financial assessment.
<br />Mr. Schmidt responded, When we use outside counsel or in -house counsel, it is within the
<br />authority of the City to propose rate increases to be voted on by the Council. We provide the data
<br />for the justification for the rate increases. With some —with water, for instance —you have to go
<br />down and get approval from the Indiana Utility Regulatory Commission, which is an extensive
<br />process. With wastewater, it is a little bit different: the final determiner on rates is the Council.
<br />We did perform studies to determine that the fourteen percent (14 %) was a defensible position
<br />for a surcharge in the State of Indiana. That fourteen percent (14 %) would be a cost - savings
<br />compared to the compact fees that we are trying to replace.
<br />Councilmember Dr. Varner asked if that research was available to those like the UN Tek and UN
<br />Kote plant.
<br />Mr. Schmidt responded, Yes, we have provided them with the data. Frankly, we have had a fair
<br />amount of give -and -take. We try to be as helpful and cooperative as possible. We both have a
<br />shared interest in trying to get this right.
<br />Councilmember Davis asked how special rates could be determined for water users in a manner
<br />that was not discriminatory to any other water users. He also asked who would actually be the
<br />one to determine when and for whom to apply special rates.
<br />Mr. Schmidt responded, stating that any contract entered into by the City would be available for
<br />anybody to review. He stated that if two (2) customers have similar or identical circumstances
<br />and one (1) gets a special rate, then the right thing to do would be to apply the same special rate
<br />to the other customer. He stated, If they are different conditions, that would require someone to
<br />be treated and judged differently. The ultimate decision - making comes down to: is there
<br />financial justification for this particular rate - savings? Can our financial experts review the
<br />documents and the evidence put forward by a customer and say, "Yeah, this is legitimate, and
<br />this is entitled to X amount of savings," based upon their argument. Then you move forward on
<br />that. All of that becomes very transparent.
<br />Councilmember Davis asked again who would be the one to actually make the decision
<br />regarding applying special rates.
<br />Mr. Schmidt responded, It would go through Public Works...
<br />Councilmember Davis added, Which is a public meeting.
<br />Mr. Schmidt responded, Exactly. You've got the agendas published, you have agenda review
<br />sessions before a matter gets voted on, then you have the actual meeting where the board takes
<br />formal action, and then it would come throughI'm presuming —three (3) readings of Council,
<br />as well. So, the initial time it would be on there for a first reading it would be a committee
<br />hearing-
<br />Councilmember Davis interjected, So, the special exception would come back to us then
<br />afterwards...
<br />Mr. Schmidt responded, Absolutely.
<br />Councilmember Davis asked, So, they go through two (2) public bodies, then the Board of Public
<br />Works, and the City Council to make that recommendation —is that not correct?
<br />Mr. Schmidt responded, Absolutely. You are correct.
<br />Councilmember Davis responded, So, it's not just arbitrarily done so that Person A gets it, and
<br />Person B gets it, and they walk out the room with it.
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