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Local News

August 9, 2013

Galveston water utility nearly broke, rates may rise

Rate hike of 53 percent to increase cash flow recommended.

GALVESTON — Residential water rates in Galveston may increase more than 50 percent, if recommendations from a study presented to members of the town council are implemented.

John Roberson, superintendent of Galveston utilities, said Monday there has not been a rate increase since 2006 and rates normally are reviewed every three years to avoid large increases.

The minimum charge for water service is $20.62; the study recommends increasing that to $31.49, a 53 percent increase.

The Indiana Department of Environmental Management estimates residential customers use an average of 4,000 gallons per month. That currently amounts to $29.91 a month and would increase over the next five years to $45.68 if the board adopts the recommendations.

The study, done by Therber, Brock & Associates of Indianapolis, was commissioned because the city utility’s fund is dangerously low. The water utility’s operating cash balance at the end of 2012 was $6,969.

The study urged the creation of a capital improvement fund, estimating the town was looking at equipment purchases in the next few years of $242,000.

Pat Gunning, president of the town council, said the town’s water rates are among the lowest in the area.

The study further recommends increasing the tap fee to $900, which is a $255 hike in the current rate, or 40 percent.

To simply break even, the water utility will need to hike rates 44.15 percent, the study says. That amount wouldn’t provide funds to cover inflation or unexpected expenses.

Board members are expected to consider the rate increase at the September meeting.

Mitsey Goodman, Galveston clerk/treasurer, said the board will probably consider an increase in the wastewater rate, since the two are connected.

She plans to request establishment of a capital improvement fund for the water utility in the 2014 budget, which could require another increase in water rates.

The council is also considering an increase to the $4 per month residents pay for trash collection.

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