Angola council reviews water, sewer finances and five‑year capital plan; consultant flags possible rate increases

Angola Common Council heard a detailed presentation Monday from Baker Tilly on the city’s water and wastewater financial management reports and a draft five‑year capital improvement plan that together suggest the city may need to raise utility rates to fund identified projects.

Jeff Raul of Baker Tilly said the water utility ended 2024 with about $250,000 more cash than the prior year and fund balances roughly $2.7 million above minimum reserve requirements, but a five‑year projection that includes planned capital work and existing debt service would leave rates insufficient under current assumptions. The report lists about $6.4 million in capital projects over five years and assumes roughly $4.0 million would be bonded (in 2026–2027), $400,000 would come from TIF, and $753,000 from prior 2025 bond proceeds; the net rate‑funded capital built into the model is about $1.2 million, or roughly $238,000 per year on average.

"We first look at cash position," Raul told the council, describing the report’s structure. "Based on the assumptions we've built in currently, we'd be looking at a rate adjustment of about 29%" for the water utility to cover operating costs on budget, current and future debt service and the rate‑funded capital program, he said. Raul emphasized the figure is preliminary and that the city could phase any increase, change the capital plan or apply non‑utility funds to reduce the needed adjustment.

Council members asked about revenue from the Pokagon extension. Raul said the model uses an assumed flow provided by engineers and city staff; the added water revenue from Pokagon was estimated at about $43,000 per year. "We haven't added in or assumed any additional connections," he said; any extra connections would be a "bonus" to the modeled revenue.

On the wastewater side, Raul said total cash increased by about $579,000 in 2024 and fund balances exceeded minimum reserves by more than $3 million. Operating revenues ran roughly $60,000 below budget while operating expenses were about $279,000 under budget; nonoperating revenues were higher than expected largely from interest income. Baker Tilly's preliminary projection for the sewage works showed a potential rate adjustment of about 14% based on current assumptions. Raul noted the utility has outstanding bonds that mature in 2029 and that starting in 2030 roughly $175,000 per year in freed debt service could be available for capital or operations.

Council members and staff pressed on asset management and deferred maintenance. Raul said the city prepared asset management plans for both utilities as part of the SREP program and that an asset management requirement was enacted in the recent legislative session; the plan schedules replacements over a 20‑year period and overlays those needs with a financial projection.

Several council members urged caution about immediately adopting the full modeled increases. The consultant and staff recommended taking a holistic view—await the comprehensive financial study Baker Tilly is preparing, consider phasing increases, and evaluate whether the city wants to infuse non‑utility funds into select projects to lower rate pressure. City staff noted the statutory ordinance process and public hearing requirements that would accompany any rate change.

Votes at a glance: the council did not take a rate or bond vote at the meeting. It did approve multiple routine and project motions later in the agenda, including a change order for the Bocaigan Utility Project, a 2026 fire protection agreement with Scott Township and standard accounts payable (see provenance and actions section below).

Provenance: Baker Tilly presentation and rate discussion begin at the council's agenda item introducing Jeff Raul, Baker Tilly (transcript start: "Can we have a drum roll... Jeff Raul, Baker Tilly, presenting the financial management reports"), and continue through the question-and-answer exchanges about Pokagon revenue, capital plan funding and rate phasing (transcript blocks spanning s=327.27 through s=2316.5452). Specific numeric summaries appear in the executive summaries for water and wastewater in the report materials referenced during the meeting.

Ending: Council members asked staff and the consultant to return with recommendation options after the comprehensive study; no formal rate ordinance was introduced at the meeting. The council indicated a preference for phasing and for exploring non‑utility funding options before adopting a final rate increase.