City of Evansville Seeks Water Rate Increase, Full Modernization Could Cost over $400 Million

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May 23, 2012 Contact: Allen Mounts

For Immediate Release (812) 436-4560

amounts@ewsu.com

Evansville Water and Sewer Utility submits request for water rate increase to

Indiana Utility Regulatory Commission

June 4 field hearing in Evansville planned

EVANSVILLE, Ind. – Last week, the Evansville Water and Sewer Utility submitted a case in chief to the Indiana Utility Regulatory Commission (IURC) for a three-year phased increase in water rates. The rate increase is necessary to address rising operating expenses and fund essential – and in some cases mandated – repairs as well as additions to the current infrastructure, most of which is aging and in need of significant upgrades. Filing the case in chief is the step in the IURC’s process during which a utility may submit usage data and documentation supporting an increase in usage fees. The Utility began the process by filing a petition with the IURC in December 2011. The Utility will notify its customers of the proposal via mail later this month.

Evansville’s monthly residential bill for 5,000 gallons of water is currently $14.42, significantly less than many surrounding communities. If the IURC approves the water rate increase, the monthly residential bill for 5,000 gallons of water – before the fire protection surcharge is added – will increase to: $17.19 in 2013, $18.86 in 2014 and $20.34 in 2015 Those amounts are still considerably less than monthly residential bills for the same water usage in nearby communities, including Indianapolis ($27.90), Princeton ($31.95), Mt. Vernon ($35.20), and Newburgh and Terre Haute ($36.38).

“The time has come for Evansville to invest in its aging infrastructure,” said Allen Mounts, Evansville Water and Sewer Utility director. “We have 1,000 miles of water lines, and almost 600 miles are old, cast iron pipes, which are not durable enough to stand the test of time. The water filtration plant is more than 115 years old. Postponing much-needed capital improvement projects increases the likelihood of water main breaks and system failures.”

Recently, the Utility replaced 1.9 miles of water line along Kratzville Road, which cost approximately $1.5 million. Industry guidelines suggest replacing 1 percent of water lines each year, which would be 10 miles per year for Evansville. At a rate of $700,000 per mile, the Utility would need more than $21 million during the next three years to meet those conservative standards. However, over the next three years – even if the rate increase is approved – the Utility will only have funding to replace 4.5 miles of water line, far less than the recommended 30 miles.

Mounts said, “The Utility is carefully balancing the desire to keep rate increases low while addressing the need to raise enough capital to mitigate risks in the Utility’s massive infrastructure.”

June 4 field hearing open to the public

At 6 p.m. Monday, June 4, the IURC is hosting a public hearing at the Bosse High School auditorium – 1300 Washington Ave., Evansville – to allow the public to submit questions and feedback on the request for a rate adjustment. It will be several months before the IURC reaches a decision.

“We realize that any increase in utility rates will impact our customers,” Mounts added. “We are working to make this process as transparent as possible and encourage those who want more information to attend the IURC’s hearing.”

Evansville Water and Sewer Utility’s last water rate increase was approved by the IURC in 2007 and phased in through 2010.

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18 COMMENTS

  1. When planning their annual home maintenance, utility, and general household budgets in Vanderburgh County several years into the future, homeowners need to keep a few things in mind.

    The most recent water/sewer rate increases during the second term of the Weinzapfel administration reflected payment for the $50 million storm water improvement on the Southeast Side of Evansville. Check out the rate increased that $50 million cost you.

    At the same time, the same administration’s spokespersons projected the cost of the combined sewer overflow (CSO) improvements at $500 to 750 million in 2010 dollars, if I remember correctly. So, multiply the rate increases you’re paying for the Southeast Side projects by a factor of 10.

    Now, under the current administration, we learn that in addition to total rate increases that in 2010 were projected to total over $25 per month for low usage homeowners, we now may expect an additional 6 or so dollars a month to pay for these new proposed improvements.

    Actually, I challenge the figure of $6 per month considering the estimate given in 2010 for $550 million in improvements (the SE Side + the CSO redo) was about $25 per month. How then can the same utility experts estimate this additional $400 million improvements at only $6, or about 1/4 the increase they estimated for $550 million improvements?

    My figures may be a bit off, but that’s the way I remember it from my notes taken at the series of sewer rate increase hearing in front of the city council.

    Why am I, a county resident, so concerned about rate increases purported only to bring my monthly bill into parity with Indy, Princeton, or Newburgh? Well, remember that we outside the city limits, with newer sewers that we paid for in the costs of our homes because developers and homebuilders paid the cost of the extentions … we are charged an additional 35% on our sewer bills essentially to pay for reconstruction of aging infrastructure in the older parts of Evansville.

    The water/sewer utility has never published or distributed findings to justify the county surcharge. They most frequently claim they impose it because the law allows, and some vague reason that our sewage passes thru the old infrastructure on its way to the treatment plants. I continue to point out that all the vast and newly annexed areas of the East Side have newer infrastructure also installed and paid for when by property owners when those areas were outside the city limits, and the distance from many of those newly annexed areas to the closest treatment plant is significantly farther than the distances from say Melody Hills, Highland, and Center Township along Old State or S.R. 57.

    The government reorganization plan includes a section that eliminates the 35% surcharge imposed on sewer users outside the existing city limits. Seems the reorganization committee realized something that the city water/sewer rate setters have yet to realize: Excessive rates will drive homeowners into Warrick and Gibson even when the water rates in those counties are just as high simply because the tax rates over there are so much lower!

    • This is a complicated issue and you make many very valid points. I do not have many direct answers to your comments but wanted to add some comments in reference to your points.
      When discussing the actual cost of providing water/sewer utilities to all in the city & county we must factor in the costs that it takes to run to a city resident vs. county resident. Although I have no hard numbers and I could not prove it, I would guess it takes 10-20 times the amount of pipeage to deliver the same water/sewer services to County residents as opposed to those in the City. If you use this cost multiplication factor against any proposal I would venture to say that the county residents are still getting a better deal than the City residents. 35% does not seem fair because we know that the difference between running a 12” pipe 10ft and a 24” pipe 10ft is triple the costs. This extra size cost is historically absorbed in city projects.

      • I agree there are other factors to consider. However, with regard to the distance water must be piped to the user, I suggest you draw a circle with the water treatment plant on Waterworks Road as the centerpoint and the circumference matching the Warrick County Line, which is the existing eastern city boundary. Now follow the arc of the cirle northward and westward around to the Kentucky State Line in Union Township.

        When you draw such a circumference, you will find there are many residences and businesses within the city limits to which water is piped (and from which sewage is drained) that are significantly farther than residences and businesses outside the city limits particularly in Center and Perry townships.

        How do you rationalize the 35% surcharge to service areas outside the city limits that are closer to the water and sewer treatment plants than some service areas inside the city limits?

        With regard to projects inside the city for which you say the cost is absorbed by the city, please refer to three recent sanitary sewer projects in the past 2 years where the cost was paid from the city council’s most recent sewer rate increase rather than from Barret Law projects as is done out here in the county where the beneficiaries pay the freight ourselves. Those 3 city sewer extension projects were billed through the 2010 rate increases, and we county residents paid the 35% surcharge without benefits, and solely to serve the city homeowners who got the sewer extensions on the cheap.

  2. I suggest we use Casino Aztar revenue to upgrade our sewers and not place the burden on already taxed to death homeowners.

    The Casino revenue can be used for:
    “Capitol improvements, equipment purchases, storm drainage, street repair projects, economic development, revitalization, community development, disaster or emergency situations, bond payments and more.

    “We The People” need a break. …

    • Dave Mosby is a fool but he was right about this. At least he was right until his master Weinzapfel told him to shut up and support the $127 Million arena. Sheep should not be elected to public office.

        • Even Al Lidsey figured out EarthCare and if David Mosby long ago figured out the sewer problems, maybe the Mayan calendar is accurate.

    • This is an incredible development, as well as an outrage. So its $ 400 Million for Water Dept. fixes and $ 500 to $ 750 Million for Sewer Dept. fixes ? The idea of putting band-aids on Roberts Stadium and saving the $ 8 Million annual Bond payments on the Arena to put towards these needs sounds like obviously sound advice. What in the world were our elected representatives thinking ? Gee, I wonder why these things are just now starting to get addressed AFTER the Arena is open ?? I do hope people share my disgust with these developments and their timing, and show up on June 4th at Bosse. The Arena was larceny in plain sight, and the ratepayers will make up the difference.

  4. So between this $400 Million+ and the CSO troubles that the EPA is forcing the City to do we will be stuck with a tab of a Billion dollars to be able to drink and poop safely. That is $25,000 in debt for every household in town. Just paying the interest will add $125 per month to our bills. I think it might be time to move. A half century of negligence has run me off.

    • Don’t forget the highest electricity rates in the State; and the debt, embarrassment and unfinished business created by Jonathon’s Joyride. …

      • bubbageek, but they had such good and visionary intentions for the historic Greyhound Station, the historic McCurdy Hotel, the historic Post Office, and the 70ish Executive Inn. Don’t be a mean spirited taxpayer and judge them only on results (sarcasm). Surely, Bush, Chaney or Haliburton was to blame. Remember, that now in many schools doing well well means someone else didn’t do as well and they may have their feelings hurt (sad but true).

    • you need to add another 8 % to your Billion dollar figure, which is the “automated meter readers” coming soon from Johnson Controls. $ 80,000,000 of “Guaranteed” savings if we get “accurate meter readings”. I wonder who will actually pay for the “accurate” readings ? We can’t afford the “luxury” of automated meters in a Billion dollar hole scenario.
      As 292 commented, these automated meters are not ‘infrastructure’. Please call your councilor and get these automated meters squashed. Another $ 80 Million we can put in the lockbox. Only thing we should keep from Johnson Controls is the word ‘Guaranteed’, and then we can call the Billion dollar effort ” GUARANTEED SEWAGE”, cause that’s what we got !

      • We will soon be able to read the water meter from space but we can’t wipe our aassss and know the paper and the turds are leaving the neighborhood. Only in Evansville.

  5. If I had any prayer of being able to sell my house, I’d move tomorrow. This town is a cesspool.

    • This is the sweetest little town I have ever known.
      The people are the most polite and nicest I have seen.
      It is not a cesspool.
      It is a preview of what is to become of the whole country.
      We are a “magic town” of a profiler’s dreams.
      Our small population is an ideal for samplers to understand just how much people are willing to take.

  6. $127 million for the Ford Center. That sure would make a great dent in the water/sewer needs of the city and county. But then we must have entertainment because there is “nothing to do” in Evansville. What a crock! Does the public need all flash and mirrors or real substance for good living conditions? Too bad the financial clock cannot be reversed. Trouble is even if we protest at the upcoming IURC meeting that doesn’t make the need for infrastructure improvements disappear. There goes another big chunk of my 401k.

  7. The “automated meter readers” will eliminate nine jobs paying about $40,000 per person. That is if they do not add any new maintnenes. We paid a private company to run the dept on the cheap for twenty years. We got what we paid for. If ten miles is Industry guidelines why are we not doing this. I m assumming our water is up to “Industry guidelines”. I am assumming our treatment plants are up to “Industry guidelines”. What else is not up to “Industry guidelines”.

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