Crown Point defers new water, sewer ordinances

At their meeting on Feb. 3, the Crown Point City Council had the first reading for the ordinance that will set the sewer rates for this year, and the second reading for the ordinance that will set the water rates for 2025 on the agenda.

However, council elected to defer adopting these ordinances until their March meeting.

At the beginning of the public hearing for Ordinance 2025-01-03, which sets the water rates for this year, Mayor Pete Land explained the city buys approximately 1 billion gallons of water annually from Indiana American Water Company, who in turn follows the rules of the Indiana Utility Regulatory Commission (IURC).

“So any time they want a rate change, they just can’t do it on their own,” Land explained. “They have through state process and the IURC is the ultimate (authority) in any kind of rate change.”

Land said IAWC was seeking a 49% rate increase for all of their water systems across the board in 2023, indicating the move was at least partially to pay for maintenance to the infrastructure for the utilities across they own. However, the mayor opined since Crown Point owns their own water infrastructure and merely purchases the water from IAWC, the city shouldn’t have to foot the bill for infrastructure updates they would have to pay for in the first place.

At a regional hearing in Gary about the rate hike, Land addressed the panel from the city’s perspective.

“Crown Point is different,” Land explained. “We own all of our own utility. So my argument to the panel was that that needs to be taken into account.”

IAWC was ultimately granted a 36.9% rate increase by the IURC, Land said, noting the water company hiked the rates in three installments: 24.11% in Feb. 2024; 8.29% in June 2024; and 4.53% this year. And while Crown Point absorbs some of this cost, Land said the lowest amount the city is able to pass on to the customers is 19%.

Additionally, Land cited a recent EPA regulation that requires all communities to perform a lead line survey for all houses built prior to 1991. He said the city would pick up the tab for the affected homes for line replacement from the street to the house. Land said even though this portion of the project is still a couple of years away, the city may be able to receive a $5 million loan from the state to help offset the cost.

Al Stong, president of Commonwealth Engineers of Indianapolis, noted the Infrastructure Investment and Jobs Act, which was signed into law in 2021 by President Joe Biden, provides five years worth of grants and subsidized loans for lead line replacement projects.

Stong estimated the lead line replacement projects completed in Crown Point in the past cost approximately $15,000 per house. He explained the city owns the line from the water main to the right of way, and the homeowner owns the line from the right of way into the house. Stong said the lead line replacement would become financially cumbersome to the average homeowner, so they decided to obtain grant money to offset the cost.

Greg Guerrettaz of Financial Solutions Group of Plainfield, the city's financial adviser, clarified Stong’s comments, and explained what the engineer referred to as a grant is actually a 0% loan, in which the principle will have to be paid back.

Guerrettaz noted the city has actually went through five water rate increases; the first coming in 2010 and the subsequent increases in 2018, 2019, 2020 and 2022. He explained prior to purchasing water through IAWC, the city purchased water through Gary-Hobart Water, which “didn’t change rates ever,” allowing Crown Point to keep their rates low. Guerrettaz also noted the city purchases the water from IAWC at a discounted rate.

When the water ordinance came to a vote, Land recommended the vote to adopt the measure be deferred until the March meeting as only councilmen Zack Bryan, Joe Sanders, Chad Jeffries and Bob Clemons were at the meeting.

Councilman Scott Evorik attended via Zoom. Council members Andrew Kyres and Laura Sauerman were not in attendance at the meeting.

The motion to defer the water rate ordinance passed 4-0, with Evorik abstaining. The motion to defer the sewer rate ordinance passed 5-0.

The next meeting will be held at 7 p.m. Mar. 3.