Terre Haute city council to consider 33% sewer fee increase

(WTHI File Photo)
(WTHI File Photo)

TERRE HAUTE, Ind. (WTHI) – When the Terre Haute City Council voted down a storm water fee proposal from the administration, that same administration already had written an ordinance that would raise sewer fees.  Most likely the administration could see the writing on the wall as far as the storm water fee is concerned, and Mayor Duke Bennett has been saying for some time that the sanitary needs new revenue in some form.

“That’s the only two funding sources we got to help us get to the next level that we need to be, and that next level is delivering the long term control plan,” for the sanitary district, said Mayor Bennett.

The ordinance to be considered by the council would increase fees by 33%, assuming it passes the Sanitary Board, who will hold a public hearing and then vote on the proposal on October 11th at 10 a.m.

Mayor Bennett says the extra funding is needed for two reasons.  One, the Indiana Finance Authority requires all present and future bonds for the long term control plan be funded at 125% of the project’s cost. Two, the increase will allow the sanitary district to bond Phase 2 of the project (Phase 1 is nearly complete). Mayor Bennett asks readers of this article to keep in mind the long term control plan is an EPA-mandated project, and the city could be subjected to steep fines if the plan is not followed.

Those who’ve been closely following this issue know there’s a so-called elephant in the room… and it’s name is PILOT, short for Payment in lieu of Taxes. Currently, the administration is pulling $5 million from the sanitary district and placing a PILOT fee into the General Fund. It’s in the current budget. Several opponents are critical of the move.  Some say using PILOT is a “shell game” or a way to “rob Peter to pay Paul,” referencing the General Fund’s deficit, which as of December 31, 2015 was -$8.293 million.

To address the budget deficit, Mayor Bennett convinced the council to pass a trash fee, which adds $10 each month to customers of the sanitary district WHO LIVE IN CITY LIMITS. Mayor Bennett says the PILOT fee plays a role in reducing this deficit as well.

Mayor Bennett points to municipalities who offer utilities and use PILOT as a means to recover the costs of offering the services which benefit entities who don’t pay into the city’s tax property tax base (which funds the General Fund). This would include out-of-town customers and non-profit organizations.

“The PILOT will sustain our General Fund,” Mayor Bennett said, “because the only thing I have left to cut is police and fire. And if they (the city council) decide we’re not going to do a PILOT, then I’ll have to have significant layoffs in police and fire, because there’s nothing left.  We’ve cut all those other areas.”

Bennett also points to Evansville and Indianapolis, communities he says are considering increasing their respective sewer rates by as much as 150%. He says that’s a far cry from the 33% he’s proposing.

“This ensures we still have the PILOT,” the mayor concluded. “This will ensure it will stay in the budget, and that takes care of our General Fund. So, this is the last step in solving our financial issues.”

Mayor Bennett says the sanitary district will pay off one of its bonds in 2019, which the district will use that savings for bonds on Phase 3 of the long term control plan.