Consultant tells Town of Sellersburg phased water and sewer rate increases likely needed to cover projects and higher costs

At a Town of Sellersburg workshop, Andre Riley, consultant with Baker Tilly, told town leaders the utilities will likely need phased rate increases to match revenue needs for planned capital projects, higher operating costs and existing debt.

Riley said the firm’s water cost-of-service work followed the American Water Works Association manual and that the water rate design they propose would simplify the current six declining consumption blocks into three, while allocating roughly 76% of water system costs to the residential class. "When we're doing a cost service study, you're trying to allocate cost based on how different types of users use the system," Riley said.

The recommendation for the water utility reflects a 5-year financing assumption that includes a $17,600,000 capital program sized on a 35-year issuance, Riley said. Under the model Baker Tilly ran, the town’s consolidated water revenues would need to increase from about $3.1 million currently to roughly $5.0 million over the multi-year period; on average across the five-year model the firm showed a 44% increase for residential accounts, 66% for commercial and larger percentage…