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Council approves amended water rate package and authorizes revenue bonds to fund $70M in water projects
Summary
The council approved amendments to a proposed water‑rate increase and authorized revenue bonds to fund water system improvements, including federally mandated lead service line replacements. The package includes phased customer rate increases and a system development charge aligned with neighboring communities.
The Lafayette City Council approved an amended water‑rate ordinance on second reading and passed a companion revenue bond ordinance to finance a multi‑year water infrastructure program.
Mayor (addressing the council) described a roughly $70 million program of waterworks improvements that includes main replacements, a new well field and about $30 million earmarked for lead service line replacements the city must address to meet U.S. Environmental Protection Agency requirements. The mayor said $5 million in grant funding has been obtained for an initial phase but additional funding is uncertain, so the city sought a rate and bond package to ensure the work could proceed if necessary.
Council members approved an amendment to reduce the proposed system development charge and to set the final fee at $520 to align more closely with nearby municipalities. The council then voted to adopt the amended water‑rate ordinance on second reading; staff said the ordinance would start a formal rate‑case filing with the Indiana Utility Regulatory Commission and include public hearings in the IURC process before any final statewide approval.
Officials described the proposed customer impact as phased increases: the mayor said the monthly bill for a typical customer using 5,000 gallons would rise from $17.81 to $23.32 in phase one (approximately 30.9 percent) and noted an additional later phase that staff estimated would further increase rates (cumulative percent cited in discussion). City staff and the mayor emphasized that if the city secures additional grants or low‑interest loans, rate impacts could be adjusted downward.
To fund near‑term work while the regulatory process proceeds, the council also approved Ordinance 2025‑32 authorizing issuance of revenue bonds not to exceed $70,225,000. Staff said the bonds would be sold to the Indiana Finance Authority, carry an interest cap not to exceed 7 percent and include up to a 35‑year repayment period; the ordinance passed 8–0.
Council members and staff noted the package will trigger a year‑long administrative process with the IURC, during which rate arguments, hearings and additional public input will be scheduled. The council also switched from a previous cost‑recovery method to a system development fee for new connections to align with regulatory guidance and make development charges clearer for builders.
The council approved the amended water‑rate ordinance on second reading and instructed staff to proceed with the IURC filings and public hearing schedule. Officials said the city will separate any outside grant funds received for lead‑line replacement from the rate request so future grants would reduce the rate burden if secured.
