By Becky Killian, Staff Writer
Salem’s utility customers could see water and sewer rate increases over the next three years.
The rate increases received preliminary approval during the Monday, Feb. 10, meeting of the Salem Board of Public Works and Safety and the Common Council.
No rate increases will take effect until after a public hearing, which will be held at 5 p.m. Monday, Feb. 24. Following the hearing, another vote will be held that will either approve or halt the rate increases.
The current monthly water bill for utility customers who use the average of 4,000 gallons a month is $35. That rate would increase by $7 in 2025; $3 in 2026; and $3 in 2027.
A report provided by Baker Tilly Municipal Advisors indicated the rate increase is needed to pay for the utility’s operation and maintenance costs, which have increased by more than 50 percent. The utility also needs additional funds to build and maintain a required cash balance as well as fund capital projects.
The Board of Works unanimously recommended the proposed rate increases to the Council. The Council vote was four to one, with Councilman Roger Pennington voting against the increase.
The current monthly bill for sewer customers who use the average of 4,000 gallons a month is $40 monthly. That would increase to $47 in 2025; to $55 in 2026; and to $57 in 2027.
The reasons given for the sewer rate increases also include covering maintenance costs; to maintain a required cash reserve; to fund capital improvements; to refinance an existing debt used to upgrade the sewer plant; and to pay for a $7.6 million bond for more improvements that have been mandated by the Indiana Department of Environmental Management.
The project will include the replacement of undersized pipes and lift station rehabilitation. The $7.6 million bond is from the Indiana Finance Authority and will have an interest rate of 2.11 percent.
The sewer rate increases received preliminary approval from the Board of Works and the Council in unanimous votes.
When asked why he opposed the water rate increase, Pennington said, “I understand the hardships local residents are feeling right now with the cost of everyday life. It is my responsibility as their councilmen to look for ways to address needed water infrastructure updates without passing on the cost to our residents. Like our President, I believe we have not done our due diligence to cut spending and reduce fraud, waste and abuse. The results of the Water Task Force that I led last year, found significant waste and recommended several cost-cutting measures that were ignored. I cannot support any increase to the cost of living for our residents until, we as a city government have reduced our wasteful spending and maximized every other resource available to us.”
Pennington proposed the formation of the Task Force last March. It included three citizen members and two council members. The stated purpose of the Task Force was to restore confidence in the city’s water utility; however, after months of study, the three citizen members of “Task Force Clean Water” delivered their final report to Salem officials only to have it countered with a separate report by the two elected officials who served alongside them: Pennington and Dylan Moore.
The citizen members were Tom Jacobs, Becky Dewees, and Jason Cockerill.
The citizen members reported that they didn’t find any “gross waste or mismanagement.” They also pointed out that state law requires that utilities collect sufficient rates to maintain the utilities.
Pennington and Moore questioned whether the water utility was in dire financial condition, criticizing how much the city pays for chemicals, sludge hauling, and engineering fees.
At the Feb. 10 meeting, Moore was among the four council members who voted in support of the proposed water rate increases.