Newburgh proposes $41.3 million bond and phased rate hikes to fund EQ tank, officials say

Town of Newburgh officials on Thursday presented a plan to issue an approximately $41.3 million bond to finance a wet‑weather equalization (EQ) tank and preliminary screening work at the wastewater treatment plant, and proposed phased rate increases in 2026–2028 to cover debt service and asset‑management obligations.

Doug Baldessari of consulting firm Baker Tilly told the council and the public that the EQ tank is intended to hold excess flow during heavy rain so the plant can treat wastewater without overflowing. He said the system’s design hydraulic capacity is about 19.2 million gallons per day but the plant now receives more than 25 million gallons per day during storms, which has forced operators to throttle pumps to avoid overflows. Baldessari said the planned project and related work are the largest drivers of the proposed rate adjustments and that the town expects to market a 20‑year open‑market bond with two years of interest‑only payments to moderate early-year impacts.

Why it matters: town officials said the project will reduce the risk of sanitary sewer overflows, help the utility comply with an existing EPA consent decree tied to past discharges, and postpone a larger immediate expansion of the treatment plant. Baldessari said capital improvements account for roughly 77 percent of the total projected revenue need and that financing avoids an even larger one‑time rate shock.

What was proposed: the consultant presented revenue‑requirement estimates of about $17.7 million for phase 1 (2026), $19.6 million for phase 2 (2027) and $21.8 million for phase 3 (2028). Illustrative monthly minimum bills shown in the presentation increased for in‑town residential customers from $44.06 (current) to $48.97 in phase 1, $54.44 in phase 2 and $60.62 in phase 3. Outside‑town minimums were shown in the slide deck as higher than in‑town figures (presentation text provided those examples to the public).

Council and staff context: Town Manager Chris Cook and staff emphasized three drivers for the rate change: the EQ tank project, requirements to fund the town’s asset management plan (tied to state funding requirements), and rising operating costs. Staff also stressed that Newburgh’s sewer system serves far more customers than the town limits — staff cited roughly 1,500 in‑town accounts and about 9,500–11,000 customers outside town — which affects cost allocation and explains why the town’s revenues and assets are larger than a small municipality’s system.

Public reaction: dozens of residents spoke during the three‑minute public‑comment period. Lewis Ames questioned the 20‑year bond term and argued that county customers shoulder the majority of costs; he proposed changing governance to give county residents greater representation. Alex Daugherty, a civil construction worker and ratepayer, said he supported the increase as a necessary investment to prevent costlier emergency repairs and to maintain regulatory compliance. Several other commenters sought more transparency: Milton Burger and others asked for current‑year actual expense tables, a clearer line‑item explanation of what changes between years, and the utility’s total asset value; Aaron Spencer asked what percentage of asset value the AMP funds annually (staff said the AMP funding is roughly $3,000,000 per year). Kitty Taylor described recurring street flooding and urged accessible online documentation of cost breakdowns.

Questions and clarifications: residents repeatedly asked why out‑of‑town customers pay higher rates than in‑town customers. Staff explained that in‑town customers are effectively owner‑customers who pay town taxes and historically received lower rates and that Indiana law created a mechanism for municipal utilities to file in‑town/out‑of‑town rates with the Indiana Utility Regulatory Commission; staff said the differential was approved in prior filings and that increases within certain thresholds do not require repeat IURC approval. Staff also confirmed the EQ tank construction estimate of roughly $35 million (project construction and contingencies) while the larger bond total includes additional projects and issuance costs that bring the total toward the $41.3 million figure shown in financing illustrations.

Next steps: no formal vote was taken at the hearing; the council closed the public hearing by motion and scheduled a short recess before continuing regular business. Staff said requested materials (detailed financial tables and the more detailed study) will be posted to the town website or otherwise distributed following the meeting.

Representative quotes: • "As rain events become more intense, the project has become increasingly important to keep the system operating within state and federal regulations," Doug Baldessari, Baker Tilly. • "This rate increase is not about burning residents. It's about protecting them from future crisis," Alex Daugherty, ratepayer and civil construction worker. • "I'm against this rate increase… I don't think it's fair for me to flush my toilet and pay a $110 a month and for it to go up to $200 a month," a concerned resident who spoke during public comment.

What remains unresolved: residents pressed for clearer current‑year actuals, the utility’s full asset valuation and a plain‑language explanation of why some customers are charged more; staff committed to supplying additional documentation. The council did not take a final financing vote at the hearing.