Council approves first reading to start 2‑phase water-rate increase and authorize financing for $70M in water projects

LAFAYETTE — The common council approved on first reading the start of a two-phase water-rate increase and authorized a revenue bond ordinance to finance water infrastructure projects, voting 8-0 to move both items forward to the regulatory and financing steps required for implementation.

Lede: The council—s action begins the formal IURC review process for proposed rate increases that the city—s consultants and staff say are needed to fund a capital plan that includes a new well field, distribution main extensions, and a lead-service-line replacement program.

What the ordinances do - Ordinance 20 25 dash 31 begins the municipal process to raise water rates in two phases; the rate case will be filed with the Indiana Utility Regulatory Commission (IURC) for review. - Ordinance 20 25 dash 32 is a bond-authorization ordinance that sets the parameters for issuing revenue bonds not to exceed the council—s stated cap (approximately $70.2 million) in multiple series to fund the capital program.

Why city officials say a hike is needed Mayor representatives and city staff said Lafayette has not increased water rates frequently (noting prior increases in February 2001 and February 2018), and that the city faces a five-year capital improvement plan of roughly $64 million. City staff and the city—s municipal adviser, Jennifer Wilson of CRO, summarized projections: the lead-service-line replacement program alone is estimated at about $30 million; total capital needs will be met through a combination of bonds, grants and loans when available.

Representative figures and sample bill impacts - Jennifer Wilson (municipal adviser) explained revenue needs: the city—s total revenue requirement was estimated at about $19.6 million versus current revenues of about $15.5 million (a gap of roughly $4.1 million). New debt service was projected to rise from about $1.5 million currently to about $6 million annually once the larger bond series are issued. - The proposed two-phase rate structure would raise a typical monthly bill for a 5,000-gallon user from $17.81 to $23.32 in the first phase and to $29.61 in the second phase, a cumulative increase in the illustrative example of about 66.2% over two years. Staff noted the percentage looks large because the base dollar amount was relatively small.

Projects to be financed City staff and the consultant said bond proceeds will fund: a new well field (to expand yield and add distribution capacity), redundant wells at the Glick well field, water main extensions to support growth in service areas 7, 11 and 11A, connectivity improvements to reduce service disruptions and improve fire protection, and the lead-service-line replacement program required by federal/state mandates.

Process and next steps The council—s approvals were for first reading and to authorize filing. The city will file the rate case with the IURC; public hearings and the IURC—s review process could change the rate outcome. Staff also said the city will pursue low-interest loans and grants (including SRF programs and other state loan options) that could reduce the amount to be borne by ratepayers. Bond issuance and final rate approval would follow IURC decisions; the city said it will structure issuance across multiple series to moderate near-term rate impacts.

Why it matters The proposed changes would raise household water bills over two years and fund multi-decade infrastructure improvements that city leaders say are necessary for growth, public health and compliance with lead-service-line replacement mandates.

Speakers quoted here include city staff and the municipal adviser for the water-rate presentation and the bond ordinance; both ordinances passed by recorded roll call or unanimous consent to move forward with the regulatory and financing steps.