Columbus City Council members will take votes on proposed water and sewer rate increases on Tuesday night.
Council members will hear the first reading of an ordinance establishing the new rates, along with accompanying bond ordinances. Ordinances must be passed on two readings to be fully approved.
The council will meet at 6 p.m. in the council chambers at city hall.
The new rates were backed by the Columbus City Utilities (CCU) board during their meeting on Aug. 19 and recommended by an outside firm, Baker Tilly.
The firm’s recommendations were based on a cost-of-service study done for both utilities. The primary driver for the increases are planned capital projects over the next few years to critical CCU infrastructure.
Members will vote on ordinances to issue revenue bonds in an amount not to exceed $61 million, plus bond anticipation notes in an amount not to exceed $11 million for sewer utility projects. They will also vote to issue waterworks revenue bonds in an amount not to exceed $36 million for water utility projects. The latter also includes $4 million in bond anticipation notes, if necessary.
The proposed new rates would help fund work to CCU’s two water treatment plants, which are running well below their capacity, various water distribution projects and modifications to both of their water tanks.
In terms of sewer collection system projects the proposed rates would help fund, the biggest is a $20 million westside interceptor that would eliminate the need for a lift station on State Road 46 and generally allow for continued growth in the area. There would also be upgrades to some of the city’s lift stations and wastewater treatment plants.
Cost of service rate adjustments will vary based on customer class.
Water rates are subject to Indiana Utility Regulatory Commission (IURC) jurisdiction, whereas sewer rates are not. Although the council may approve water rate increases, the IURC will ultimately approve a certain rate schedule, which takes about a year. Because of this, the water rate increases won’t be effective until 2026, even though the proposed phase one sewer rate increases would get started in January of 2025 if approved by council members.
The IURC will decide whether to accept the proposed water rates as presented, or may adjust them. If they are adjusted, the new water rates would come before city council one final time sometime next year for approval.
Water rates
Water rates are proposed to be increased over two phases, beginning with 18% increase in 2026, followed by another 15% increase in 2027 for a typical residential user, assuming usage of 4,000 gallons per month.
According to a cost driver breakdown presented to council members, debt service and capital improvement plan projects are responsible for 81% of the increase in water revenue requirements and about 19% is due to operating expenses.
Below is an example of an average residential user monthly bill, assuming usage of 4,000 gallons per month:
- Current ($16.45)
- Phase 1 ($19.39)
- Phase 2 ($22.29)
Sewer rates
Sewer rates are to be increased over three phases, beginning with a 5% increase during phase 1 in 2025, a 9% increase during phase 2 in 2026 and another 5% increase in 2027.
A cost driver breakdown indicated that the sewer rate increase is 48% due to debt service, 39% because of operating expenses and 13% for replacements and improvements.
Below is an example of an average residential user monthly bill, assuming usage of 4,000 gallons per month:
- Current ($40.37)
- Phase 1 ($42.57)
- Phase 2 ($46.40)
- Phase 3 (48.73)
The previous water and sewer rate increases were approved in 2021 and lasted over three phases with increases in 2021, 2023 and this year. At the time, the increases were the first in more than 27 years for water customers and 12 years for sewer customers.
