The Journal Gazette
Wednesday, June 27, 2018 1:00 am

Council OKs water rate hike to fund new pipes


Fort Wayne residents using water supplied by City Utilities will face an annual rate increase averaging about $1.50 a month for the next five years under a new rate structure approved 7-2 during Tuesday's City Council meeting.

The council also authorized by a 7-2 vote what is expected to be about $85.5 million in borrowing through a bond issue to jump-start a plan to replace 14 miles of deteriorating water lines in each of the next five years.

Kumar Menon, City Utilities CEO, told the council the higher rates were needed because the city has been plagued by an increasing number of water main breaks in recent years – 350 in 2017 alone.

Pipes are at or beyond their expected lifespan, he said, and need to be replaced.

Menon said many cast-iron pipes installed before 1900 in older neighborhoods are still serviceable. But those installed from the 1920s through 1970 are failing because pipe materials changed to divert metal to war efforts.

“Those (pipes) were less strong and more permeable, and those are the ones that are failing us now,” Menon said.

Each water main break costs about $5,000 to repair, he said. Water officials want to try to get ahead of the problem now, because about 350 miles need replacing, he added.

Officials have chosen vulnerable pipes to replace in 25 neighborhoods scattered throughout the city, Menon said.

After the initial five-year push, they want to keep replacing pipes at an 11-mile annual pace using money from the rate increase.

“Things that have been ignored in the past are coming home to roost,” Menon said.

The new rates will up the monthly bill for the average residential customer using 4,000 gallons of water by $1.34 in 2019, $1.43 in 2020, $1.53 in 2021, $1.57 in 2022 and $1.67 in 2023. Implementation likely would not come until the second half of next year.

City Council members expressed both support for the plan and reservations. Councilman Tom Didier, R-3rd, said he's heard from single people and seniors on fixed incomes for whom the rate increase is a burden.

Jason Arp, R-4th, moved to cut the increase by 50 percent, saying the hike comes on top of others, such as the wheel tax, an electricity rate increase and a sewer rate increase. He said other funding, such as the Legacy Fund created by the sale of the city's electrical utility, could be tapped.

“You're asking people to pay higher water bills to do things like the Riverfront and The Landing,” he said.

“No. We're not,” Menon replied. Arp's motion did not receive a second.

Arp then voted against the original rate proposal and the bond issue, joined both times by Russ Jehl, R-2nd.

Jehl said he voted no partly because he did not have enough time to solicit his constituents' views.

“I certainly agree the state of our infrastructure does need attention. I would have been more comfortable if we weren't repeating past mistakes (with bond financing) and it was more of a pay-as-you-go,” Jehl said.

However, Paul Ensley, R-1st, said he saw merit in the bond approach.

“This (increase) affects every household in Fort Wayne, and I don't think it's responsible to kick the can down the road.”

John Crawford, R, at-large, said he saw the issue as deciding where to be on the continuum between “doing everything now” and continuing to put off improvements.

The rate increase must still be approved by the Indiana Utility Regulatory Commission, which has 30 days to do so. The amount that panel approves will determine the amount that is borrowed through the bond, Menon said. The commission could decide to grant a lesser amount, but any substantial change was unlikely, he said.

“The IURC isn't looking at reducing investment in infrastructure. I don't see them saying. 'You must spend less,'” Menon said.

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