Berne City Council on Monday evening approved the city's first water rate hike in more than 30 years. Following a lengthy discussion the panel agreed to an increase which will boost the average customer's monthly water bill by nearly $8.50.
Clerk-treasurer Gwen Maller said residents of the city of Berne have not experienced an increase in water rates since 1980. The last time water utility rates in the city were adjusted was 2000, and on that occasion the rates were reduced, Maller said.
But a rate consultant hired by the city reported said last month that the water department is losing approximately $140,000 annually and the department's cash reserves have fallen from $1.5 million just three years ago to around $500,000 today.
Steve Carter, a rate consultant with the Plymouth-based H.J. Umbaugh and Associates, met with Berne City Council on July 23 to offer suggestions and recommendations surrounding a water rate increase. Carter said Berne has the lowest water rates among cities and towns its size in Indiana. He said a rate hike is unavoidable to keep the utility financially solvent.
"Your rates are really low. In your census group, the average monthly (water) bill is $18," said Carter. "Yours is $9.54. Monthly bills under $10 are just unheard of."
The consultant recommended an increase that would see monthly water bills for average residential customers go from $9.54 to $17.96. He also laid out several other options for council members to consider. He said the city could opt to pass on to water customers the approximately $60,000 in annual hydrant rental fees paid by the city's general fund to the water department, and could also choose to require the water department to make annual "payments in lieu of taxes," which would generate some $18,000 annually for the city's general fund.
Those options would have led to even larger monthly bills for customers, and both were ultimately rejected by the council.
Maller said removing the hydrant rental fee from the general fund would add another $3 to monthly user fees, "and I'd like to keep that off the customers' bill for now. Even with the (recommended) rate increase, we are still right in the middle" of rates charged by similarly-sized Indiana cities, she said.
Councilman Ron Dull said the 40 percent hike in water rates "is a big change, but we haven't done anything in 30 years. To me, we have to do this to cover our operating expenses. This increase isn't as drastic as it could be."
Councilman Mark Wynn made the motion, seconded by Phil Provost, to implement the rate increase "as soon as possible." Maller said the change could be implemented by November or December of this year.
Council members noted that an increase in sewage rates will also likely be imposed sometime next year as the city begins a three-year window in which to meet an Indiana Department of Environmental Management mandate to lower ammonia effluent levels at the wastewater treatment plant.