[The Brazil Times nameplate] Fair ~ 81°F  
High: 84°F ~ Low: 63°F
Friday, July 11, 2014

Council receives sewer proposal

Thursday, February 26, 2009

Sometimes paying a little more helps to keep up with the times.

In a special meeting Thursday, the Common Council of the City of Brazil heard a preliminary proposal for the possibility of an increase in the wastewater utility rates.

Dan Hedden, CPA Principal for Umbaugh and Associates, Indianapolis, presented an analysis of the current status of the city's wastewater utility, which encompasses Brazil and the K&H Sewer District, and three separate rate increase proposals.

"After conducting a 12-month analysis of the financial activity, we found a 32.7 percent gap between the revenue requirements and available revenues," Hedden said. "In dollar figures, that amounts to $666,300."

He provided potential reasons for the current shortfall, the biggest of which was that the last rate increase occurred in 1996, with no incremental increases since.

"According to the Consumer Price Index, inflation has grown 36.67 percent since 1996," he said. "There could have been small increases during the past 12 years, but there is nothing we can do about that now."

Inflation, combined with the Energy Savings Performance Contract -- a payment cost of $231,500 per year -- accounts for 79.87 percent ($532,208) of the shortfall components.

Hedden also said the city is also receiving less revenue from collection compared to 1996.

"In 1996, the city collected $2,161,277, but in 2008 it was $2,036,200," he said. "There are numerous possibilities for this drop including water conservation efforts, fewer customers or a loss of a large consumer."

The three increase proposals Hedden introduced included one which was the minimum to accomplish current needs for operation (which he recommended), another which also allowed for the payment of capital additions needed in the next five years, and the third was the midpoint between the two.

The rate increase proposals were based on the average city usage of 5,000 gallons per month (see table, Page 1).

"Even with the proposed increases, Brazil would still be in the middle of the road compared to other cities and towns in the area," Hedden said. "The bad news is there is the need to make an adjustment to the structure of the rates for the wastewater utility."

Council member Pat Heffner asked what would happen to those who would be unable to afford the increase, such as the elderly.

"Unfortunately, there is no good answer for those who can't pay their bill," Hedden responded. "The best option the city can do to move forward is to start looking at incremental increases more regularly to prevent the need for larger 'headache' increases."

Wanting to look into other options which may lessen the hit on the residents, Mayor Ann Bradshaw asked Hedden what the effect would be if the city sold off the utility.

"Either way, there would have to be an increase, but you have to remember that most companies are out for profit," Hedden said. "It's not very frequent when a municipality sells a utility to a company to know the true effect, but there is a different motivation."

Hedden elaborated about the proposal by saying the proposed future capital investments would not be top-of-the-line, but would be very good quality.

"Based on information from a City and Consulting Engineer, it averages out to be a need for about $690,000 per year to cover the costs of upcoming capital needs," he said. "The fact is, you can't truly project what all will be needed in the next five years because other things happen, like a lift station can go out or trucks may need to be replaced."

Overall, Hedden emphasized the fact that smaller incremental increases are needed in the future to protect citizens from taking a large hit all at once.

"There's not a lot of other bills that have stayed the same in the last 12 years," he said.

A public hearing on the matter will be set at a later date. In the meantime, Hedden said the financial aspects can be reviewed further to try and find cost-saving measures.

The next regular meeting of the Common Council of the City of Brazil will be Tuesday, March 10, at 7 p.m., in the Council Chambers at City Hall.

Sewer rates

The following table outlines current wastewater (sewer) rates for Indiana cities and towns and the proposed rates for Brazil from accounting firm Umbaugh:

City Rate

Terre Haute $16.49

Carbon $27.65

Brazil (1996) $43.55

Seelyville $45.77

Brazil (alt. 1) $57.78

Ferdinand $58.56

Brazil (alt. 2) $61.32

Brazil (alt. 3) $64.86

Clay City $76.24

Fillmore $87.95


Comments
Note: The nature of the Internet makes it impractical for our staff to review every comment. If you feel that a comment is offensive, please Login or Create an account first, and then you will be able to flag a comment as objectionable. Please also note that those who post comments on thebraziltimes.com may do so using a screen name, which may or may not reflect a website user's actual name. Readers should be careful not to assign comments to real people who may have names similar to screen names. Refrain from obscenity in your comments, and to keep discussions civil, don't say anything in a way your grandmother would be ashamed to read.

I was there and this is needed. I know the rate hike is astronomical but what is up with the two former Mayor's? WOW talk about hurting the City! For what? They didn't have the wherewithal to think about the City's future while in Office? I guess not. Don't come down on Ann Bradshaw, she is being faced with a tough decision and is taking it head on and doing what is best for our City. Kudo's to Ann and the Council for their in depth questions and their care for our citizens!

City meeting...be there!

-- Posted by karenmeister on Thu, Feb 26, 2009, at 9:02 PM

In my opinion, I believe this needs to be done. In the city's best interest, I believe this needs to be done. For the betterment of this city, I believe this needs to be done. Unfortunately previous administrations, prior to 1996, led the public to believe that the sewer rates would eventually go down in 10 years. That is just not at all possible with inflation and the needs of the City.

This problem did not occur overnight nor in the current administration. The current administration unfortunately has to take the hit. I am glad they are trying to make the city better. I am willing to pay more for better service. It looks to me like the city has two choices.: 1. Raise the sewer rates. 2. Forced to sell the sewer utility to a private company.

I would much rather have the sewer rates increased rather then sell off to a private company. A private company is all about profit. A private company could care less if you pay your water/sewer bill or not, they will shut it off if there is no profit. A private company only cares about how much money they will have in their pockets. If it were sold to a private company you would have absolutely NO say in the current rates. That meaning your sewer rates will go up to an extremely high rate that will not be affordable. A rate higher than these proposals. After that happens, then try worrying about constituents and how they will pay.

Honorable Mayor A. Ann Bradshaw, keep up the good work and do what's right for the City of Brazil. This is not a tough decision, it has to be done.

-Eric Vanatti

-- Posted by Cessna152 on Fri, Feb 27, 2009, at 12:42 AM

i dont know about everyone else but it sure looks like a bad time to start raising everything when people are losing jobs our local businesses are closing and energy prices keep going up as well as our water rates and so far i havent seen anything done by our mayor ,her staff and the city council to help bring jobs in this area to offset costs. the only thing i am seeing in this town is more for sale signs than ever which tells me people are leaving the area for better things than we have here. It also sounds like your telling us in the same breathe that less people in our area we will have to pay more;duh even a simpleton knows more people will leave and here i thought our mayor and her staff was tryin to attract more people in the area seems like theyre are driving them out so wake up folks think of better things to do btw how much did we pay for this study; i think we coulda spent this money on better things

-- Posted by brazil citizen on Fri, Feb 27, 2009, at 8:02 AM

If anyone read the Terre Haute paper this weekend you would have noticed that the city has several "shovel ready" projects, which could possibly attract federal funds from the stimulas package. Has the city of Brazil done anything to propose a project to the federal government to help us with replacing the water tower? I wonder if any of our elected officials ever think outside of the box. The city needs vision and leadership. I can't imagine being so busy that the Mayor couldn't take the time to thank local soldiers in a public forum, prior to deployment to Iraq.

-- Posted by ucantbserious on Fri, Feb 27, 2009, at 8:02 AM

While I agree that we need improvements, I agree that alot of projects "proclaim" to be started yet we are not seeing results. I think that if the citizens are expected to pay extra money out of their pocket than the City should do their part as well. I was informed by an employee that there was a huge increase in the payroll amount from the previous year with the City -- I understood it to be almost $300,000. Apparently there are people working for the city that are not in the budget, so they are put on the water utilities to pay for. There also seems to be alot of "excess" spending of our tax dollars for holiday dinners, Christmas decorations and so on... Citizens, I think we all need to start questioning our council people, elected officials, etc...for answers! One last thought, it is difficult for a mayor to bring anything new to this city when they seem unable to speak in public. Have we had one state of city address since this mayor took office??? Just wondering.

-- Posted by discouragedcitizen on Fri, Feb 27, 2009, at 8:14 AM

This is a double edged sword. If repairs are made it further burdens tax payers who are all effected by this economic downturn but if not repaired it will further lower property values and lessen the attraction to Brazil to outside investors and home buyers, thus impoverishing the area even more than it is now. Seems that if fees have been less than what was needed to maintain the system in past, it's time to make up for it now. I know I don't live in the city but this same trend is true for county wide projects as well. Everything has gone up in price and if we don't invest to bring in a better tax base we will only go down further. It's all about getting what you pay for and thinking about the return on our investment and not only what we must have to invest first to get it.

-- Posted by Jenny Moore on Fri, Feb 27, 2009, at 8:37 AM

Just for the record, the city employees have an annual Thanksgiving Dinner and Christmas Dinner. They have a carry in and it is usually in the city garage, no charge there. Really living high on the hog, huh?

The rest of the stuff discouraged citizen stated, I don't know, so I won't comment but I do know there is no high living for the employees. I did read they will not get a raise of any kind this year.

-- Posted by Tracy Jones on Fri, Feb 27, 2009, at 10:49 AM

I understand that this rate hike is probably needed, but there are people out there that have lost their jobs (like me) who can't afford the hike. What are they suppose to do?

-- Posted by th1953 on Fri, Feb 27, 2009, at 5:17 PM

If you think this is bad, just wait until the state mandates that we replace our over 100 year old FRESH water pipes. That will be fun.

-- Posted by Conservative Dad on Fri, Feb 27, 2009, at 7:32 PM


Respond to this story

Posting a comment requires free registration. If you already have an account on this site, enter your username and password below. Otherwise, click here to register.

Username:

Password:  (Forgot your password?)

Your comments:
Please be respectful of others and try to stay on topic.