By DAVE SCHULTZ
To hear the city’s financial adviser tell it, Bluffton’s sewer customers are about to pay for the mistakes of the past.
For several years, Bluffton had among the lowest sewer rates in northeast Indiana. They were raised not long ago to $37 a month for an average household.
Unfortunately, those rates are about to be put in the city’s rear view mirror.
Eric Walsh of the BakerTilly municipal finance firm and Casey Erwin of the DLZ engineering firm brought the members of the Bluffton Common Council up to speed with what was needed in terms of sewer plant improvements. Walsh was the bearer of bad news, telling the council that those improvements that were outlined by Erwin were going to cost $60 million.
That will mean that the cost of monthly sewer treatment will rise to between $80 and $85 a month.
Inflation, changes in interest rates, and other necessary items fueled the rate increase. The Indiana Department of Environmental Management has also put the city on notice that the plant as it exists is substandard, putting some additional urgency to the project.
The city had been looking at a total cost of $40 million for all the work.
Walsh said the formula is a $5 million decrease in the total cost would equate to a $5 decrease in rates, meaning that the increase could have been to $63 a month — still salty, but not as high.
Erwin presented the improvements needed, which had four primary components — pump station improvements, a sewer manhole lining project, a complete renewal of the wastewater treatment plant, and a biosolids facility. The improvements will also made the facility more accessible during floods, and it will accounts for 20-year growth.
Walsh said the Indiana Finance Authority’s State Revolving Fund will give the city as many breaks on the financing as it can — for instance, part of the money will be financed with an interest rate in the 2 percent range as opposed to the 3 percent it would receive on the open market.
Still, he said, the city will be looking at paying $2.3 million a year in debt service.
Council member Chandler Gerber used an automotive analogy as he asked Erwin if the new plant, as designed, had pieces that were the equivalent of a Cadillac or a Mercedes that could possibly be replaced by a Ford. Erwin’s response was in the negative.
The discussion put the council members — Josh Hunt, Gerber, Rick Elwell, Scott Mentzer, and Janella Stronczek — into what Mentzer described as “sticker shock.”
“You kept your rates low by not investing into your system,” Walsh said.
“We’re not here because we want to be,” Hunt said.
No action was taken after the presentation by Erwin and Walsh, although it’s necessary that the plans and the financing package be voted on soon.
daves@news-banner.com
