GREENFIELD — Some residents’ water bills could nearly double if proposed water rate hikes are approved in Greenfield.
The Greenfield City Council is proposing an increase in water rates for the first time since 2008 as a way to balance the budget for the water utility, which has consistently cost more to operate than it has earned, officials said.
If an increase in the rate is approved, a household that uses 4,000 gallons of water a month — the average for a small family — will pay about $27 a month compared to $13.82, which they currently pay.
That’s on top of charges for fire protection, which usually increase water bills by about $3 a month.
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The city council has preliminary approved the rate increase and expressed interest in phasing the new rates in; a public hearing on the matter is scheduled for 7 p.m. Dec. 9, after which council members will be able to make changes to the ordinance based on residents’ feedback. The changes, if they receive final approval, won’t take place until 2016.
In 2014, the money the city brought in from water sales and fees was $65,000 less than the water utility’s expenses — and that figure doesn’t take into account future repairs and maintenance on the aging system, said city utility director Mike Fruth.
The water department, which provides about 2.5 million gallons of water to homes and businesses each day, needs to increase rates in order to keep up with its operating costs while performing needed maintenance on the city’s water system, he said.
Under the current rate schedule, the water utility is estimated to bring in about $2.8 million in 2016, and its expenses will total about $3.2 million, leaving the department strapped for cash.
The city can’t continue to dip into its savings to cover its operating expenses, Fruth said.
“The water utility is a huge asset for the city of Greenfield,” Fruth said. “It’s our responsibility to maintain that system.”
Buzz Krohn of O.W. Krohn & Associates, the city’s financial consulting firm, said the city has seen a decline in its operating revenues since the last hike was approved in 2008. Residential usage has decreased in recent years — in large part because of water conservation technology — and the growth boom the city saw in the early 2000s has leveled off.
Residents and property owners also will be charged a flat base rate for their meters for the first time. For homes, that will be $13 or $16, depending on the size of the meter.
Prices will be slightly higher for those residents who live outside city limits but receive service from the water utility. The base rate for the water meter will be $14.89 for most homes under the proposal, and a small household’s water usage would cost about $16.04.
When introduced at a recent city council meeting, the rate increase was met with questions about the impact the new rates would have on residents living on fixed income, such as seniors.
Some of those residents use 2,000 gallons of water a month or less, and their water currently costs $7.08. If the proposed increase is approved, that bill will nearly triple to about $20.
Krohn said the city could consider phasing in the base rate over the next three years, starting at $10 and increasing it by $1 a year until it reaches $13.
That phase-in would cost the city approximately $500,000, but it would be doable — the water department would need to rely on its savings a little longer.
“Whatever we have to do to make that work, we’ll make it work,” he said.
Councilman Jason Horning said he’d support a phase-in; council members don’t want to inflict financial hardships on residents who might already be struggling to make ends meet.
“We have to do what’s right for the utility, but we also have to make sure we do what’s right for the public, too,” Horning said.
Even with the increase, Greenfield’s water rate will still be lower than many communities, Krohn said. In Spiceland, for example, the average bill is $52.20; in Ingalls, it’s $34.90. The new rates would make Greenfield’s services more expensive than New Castle’s, which average $12.25, and Knightstown’s, which average $21.60.
Residents may address the Greenfield City Council about the proposed water rate increase at a public hearing at 7 p.m. on Dec. 9 at city hall, 10 S. State St.