Mayor: Gary residents can’t afford water rate hike
By Mike Gonzalez Post-Tribune correspondent April 10, 2014 8:54PM
Gary Mayor Karen Freeman-Wilson
Updated: May 12, 2014 6:43AM
GARY — Mayor Karen Freeman-Wilson and a few residents urged state regulators Thursday to reject proposed water rate increases during a public hearing in Gary’s Common Council chambers.
The hearing was the final one on Indiana-American Water Co.’s planned rate increase that’s before the Indiana Utility Regulatory Commission and the Indiana Office of Utility Consumer Counselor, a state agency that represents consumers in utility rate increase requests.
Indiana-American Water is requesting a 17.2 percent increase for residential users who pay their bills directly to the company and a 9.8 percent hike for sale-resale rates, or the rates that municipalities pay the company to buy water in bulk.
In Northwest Indiana, Gary, Hobart, Porter, Portage and Merrillville residential customers pay Indiana-American directly, while most residents of other municipalities pay their local water works.
The double-digit rate increase for those five communities is needed to cover rising maintenance expenses and the cost of checking customers’ water meters every month instead of bimonthly, Indiana-American external affairs manager Joe Loughmiller said.
Also, the company’s proposal calls for increasing the fire protection surcharge for those customers who pay directly from $4.12 a month to $5.21 a month — if those customers live in a town with ordinances that cover the surcharge or if they live within 1,000 feet of a water hydrant.
That surcharge covers fire hydrants, water lines to the hydrants, maintenance, financing and more, Loughmiller said.
Mayor Karen Freeman-Wilson opposes the rate increase and spoke of a $7.2 million upgrade to Indiana-American’s water plant at 6th Avenue and Madison that hit hard the Gary Sanitary District’s budget. Freeman-Wilson said Gary, with about 40 percent of residents living at or below the national poverty line, cannot afford another water rate hike.
“They’re not very good corporate citizens” as far as helping out in the city, she told the state representatives, referring to Indiana-American Water. “(The rate increase) just doesn’t balance out. I just have to tell you we’re not going to support this.”
Indiana-American officials said the water filtration and recycling project, completed in 2012, cut about $800,000 in annual fees to the sanitary district, a savings the utility has passed on to customers. They said the rate increases are necessary to pay for improvements underway, including the recycling project at the Gary plant, water main replacement and more.
The municipal water works, which distribute water on the sale-resale system, typically charge the going rate plus extra for their overhead, said Alicia Barber, the water department manager for New Chicago Water Works.
Indiana-American has had three rate hikes during the past two years, putting additional stress on New Chicago residents, Barber told the commissioners.
“It is continuously going on,” she said of the increases. “Why can’t (Indiana-American) go for one large enough increase and take it in one bite? I speak for my customers that I’ve got to talk to, face-to-face, 365 days a year.”
Gary resident Annester Walker said utility increases have a large impact on her bottom line.
“I’m a poor senior, and the rates are ridiculous, the ones I have now,” she said. “And (the rats) are going to go up, and I just get a little bit of money.”
Comments made during the public hearing will be added to the full record of the hearings before the regulatory commission, which will convene a multiday hearing June 23 on Indiana-American’s request.
For more information on the issue, including documents filed by the company and several local municipalities, visit www.in.gov/iurc.