New Palestine Town Council hears details of a multi-million wastewater expansion project that could cause rates to go up some 25 to 30%. (Tom Russo | Daily Reporter)
NEW PALESTINE — Officials working on an expansion of the New Palestine wastewater treatment facility project presented preliminary figures to the public during the most recent council meeting in early February.
The projected figures not only included an overall projected cost for the expansion, but also possible rate increases.
The new financial proposal presented by Krohn and Associates, the town’s financial adviser on the project, shows residential rates could jump somewhere around 25 to 30%. Preliminary projections show new rates could land at $83.75 or at $91.79 per month depending on how much grant money developers can secure.
“This is a big increase, and this is going to impact the town,” Council Secretary Chad Molinder said.
Current wastewater rates adopted in May of 2018 call for residents to be charged $67 with an additional $5 for stormwater per month which came due to a $4.2 million expansion in 2018. Prior to that rate increase, rates were only at $48 per month.
The rates might be slightly different, officials noted, depending on the development of several pending housing and apartment projects such as Ashton Acres, Willow Ridge and the Becovic apartment complex as all three are expected to have an impact on the cost of rates.
“The development of those projects will make a difference and should lower rates,” Council President Teri Reed said after the meeting.
She noted the council plans to study the proposal more before anything official is determined on rates.
Officials from Commonwealth Engineering also spoke to town officials and stated the expansion of the New Palestine wastewater treatment facility must move forward or the town runs the risk of violating state capacity standards.
While construction costs are estimated to be around $18.1 million, the total cost of the project is estimated at $21.3 million. The funding breakdown states some $16 to $19 million will come in the form of bonds, some $573,500 from the American Rescue Plan Funds, an estimated $1 million in town funds and anywhere from $3 to $5 million in a principal forgiveness loan which would help lower the projected rate increase.
Commonwealth president and engineer Al Stong is the project manager for the project and said the design for the expansion of the wastewater plant is complete, and they are on target to bid the project this spring. How the bids come back will also have a direct impact on the project cost as well as any rate increases.
“Right now we’re just looking to secure the financing through the state revolving fund,” Stong said. “We’re requesting I believe it is $5 million in loan forgiveness as we’re being over ambitious.”
Stong noted there are three areas associated with the expansion, including improvements of the existing facility to handle additional users. They will also incorporate the old Gem facility users to the new plant and work on eight existing lift stations.
Stong said the expansion project is indeed a “need” and not something officials are selecting to do, and unless town officials want to deal state violations and sewage on the ground, they must expand the facility.
“Your existing facility is overloaded,” Stong said.
Krohn and Associates’ Jarrod Hall is handling the financial part of the project for the town and said the project will go to bid in April with hopes of getting financial approval in June or June. He said that rate increases will pay for operations, handle debt services and bond payments as well as depreciation.
Krohn also noted town officials, who will approve the rate increases, have no choice but to do so as town officials are the ones responsible for making sure the town has a fully functional wastewater treatment facility, which is getting close to capacity.
The wastewater plant can currently handle as much as 400,000 gallons a day, an increase of 170,000 gallons came with the expansion in 2018. With the newer expansion, the facility should be able handle 1.5 million gallons per day, which officials say is needed due to current growth and projected future growth.
Community resident Chris Wernimont told town officials he didn’t think the project should be as massive and said increasing flow to 1.5 million gallons per day seemed excessive.
“Yes, there is a need, but what is that need, is it really four times,” Wernimont said. “We have to be careful relying on the experts whether local, state or federal.”
Council Vice President Bill Niemier noted town officials have never adjusted rates until there has been a need and suggested rather than hitting customers with a huge increase all at once they might consider 3% increases per year to help build a reserve for future growth.
“That way, the next time there is a need, there isn’t as much of an ask,” Niemier said. “I’d rather get ahead of it rather than get behind it.”
Molinder noted the new council must, from this point forward, visit the wastewater facility needs annually rather than waiting until the plant is in dire need of an expansion.
