FORT WAYNE – The Fort Wayne Board of Works on Wednesday approved the newly proposed three-year water rate hike, but residents shouldn’t look for further concessions from the utility.
The board unanimously supported the plan to raise water rates 40 percent over three years instead of two, as originally proposed.
Under the city’s original proposal, residential users of 5,000 gallons a month would see their monthly water bills rise from $17.25 to $21.10 in 2013 and then to $24.16 in 2014. The new proposal would increase rates to $21.10 in 2013, $22.95 in 2014 and $24.10 in 2015.
The delay in implementing the full rates would take the city’s ability to replace water pipes from 10 miles a year to 9 miles a year, and it would slightly lower the final rates. Kumar Menon, utility director, said while this would mean a loss in revenue for the utility, it was done to accommodate the many customers who asked whether the rates could be stretched over a longer time.
While the city initially had concerns about asking for a rate increase longer than two years, Menon said he has gotten assurances from the state regulatory commission that it will be considered fairly. He said the city would not pursue the option if it believed the state would just reject it.
Many on the City Council thanked the utility for stretching the rate over a longer period, but some questioned why the city can’t use some of the money from the sale and lease of its electric utility to reduce the need for a rate increase. The city has about $75 million available over 15 years from that pot of money.
Mayor Tom Henry on Wednesday, however, said he did not believe rate relief was the best use of that money.
After his State of the City address, Henry said using the money to lower property taxes or utility rates would only help the city for a year or two and then the money would be gone.
He said he would rather the money be used on projects that “stand the test of time,” although he offered no examples.
The council called a special meeting to potentially give final approval to the rate increase next week.
Electric savings
The board also approved an agreement with Indiana Michigan Power to use City Utilities generators for electricity during peak demand times for power. Under the deal, the power company can ask the utility to generate power for six hours up to 10 times a year.
The city will be paid by the utility regardless of whether it needs to generate its own power, although generating power would create some additional costs for the utility.
Doug Fasick, with City Utilities, said the contract will net the city between $35,000 and $89,000 a year in an effort to recoup some of its electrical costs.
This will be the first year the city participates in the program.
