NEW HAVEN – New Haven water customers could face rate increases of 28 percent to 55 percent over the next four years to pay for the replacement of failing water lines in the heart of the city.

The city’s financial adviser, Greg Guerrettaz, presented three options to pay for an estimated $6.2 million worth of water line projects stretched over five years. The City Council did not take action Tuesday and will likely discuss the funding options in greater detail during its next meeting.

The first option would raise rates 28 percent and only pay for projects slated for completion this year. A second option would phase in the rate increases over four years starting at 35 percent, and the city would issue two separate bonds to pay for the work, Guerrettaz said.

Under the third option, the city could raise the rates the full 55 percent now and issue two separate bonds to pay for the work. The city could also save some of the money generated from the larger rate increase to pay cash for future planned projects, he said.

The city cannot borrow the full $6.2 million with one bond because the proceeds must be spent within two years and the city’s engineering department has planned five years of projects, Guerrettaz said.

Currently, a typical customer using 4,000 gallons of water a month pays about $16. Under the proposed increases, that same customer could pay $21.53 to $26.07 depending on which option the council chooses, according to information provided by Guerrettaz.

Guerrettaz said if the bond is issued in July, the rate increase would hit September bills.

Councilman Ron Steinman said although he didn’t like the idea of raising rates he would rather raise it the full amount now rather than have to come back in a few years to raise rates again. He and other council members hoped the city could bid more projects sooner to take advantage of low construction costs.

The city last raised rates in 2001. At that time residents asked the city to review and tweak the rates periodically to avoid large increases, Mayor Terry McDonald said.

He acknowledged that the city hasn’t done that.

Since that last increase, the city’s water utility has absorbed two rate increases passed from Fort Wayne instead of charging customers more. New Haven buys its water from Fort Wayne.

Those rate increases have limited the city’s ability to pay for improvements to the system, Guerrettaz said.

West resigns

In other business, Harold West officially tendered his resignation from his seat representing the 2nd District effective June 1.

West was ill and did not attend Tuesday’s council meeting, but McDonald read a letter to the council and residents on his behalf, sharing the news.

West had announced in January he planned to move to Florida. He had served as council president since 2002 but declined to fill that role this year knowing he would not be able to attend all of the meetings.

McDonald did not know when a Republican caucus would be called to fill West’s seat.

aiacone@jg.net