Town of Speedway introduces first reading of Ordinance 1423 to raise sewer rates to fund long‑term control project

The Town of Speedway Council on Feb. 23 introduced Ordinance 1423, a first reading that would raise sewer rates to fund a large long‑term control project and other capital needs.

Jessica (Baker Tilly), a consultant who presented the town’s rate study, said the analysis examined a test year through Aug. 31, 2025 and the town’s cash balances, operating costs and anticipated capital projects. The study models two financing scenarios: a “level” debt structure that would raise typical residential sewer bills from $26.44 to $38.45 (a 45.41% increase), and a “wrapped” structure that would raise the bill to $35.05 (a 32.55% increase). The difference reflects choices about how to structure new bonds against existing debt.

Town Manager Grant Kleinhens said the largest driver is a long‑term control plan for combined sewer overflows estimated at about $19.75 million; the overall capital plan in the study totaled about $20.71 million, with roughly $5.485 million of rate‑funded projects across five years. Kleinhens and the consultant said bids for the construction work open March 5, and the town has tentatively targeted a competitive bond sale in mid‑May, with bid results expected to influence the final adopted rate.

The rate study shows test‑year operating disbursements rose to about $4.3 million from roughly $3.5 million three years earlier, and that capital projects and debt service are significant cost drivers. The town considered state programs such as the State Revolving Fund and the SRF pooled program but was not in the top fundable range for the traditional SRF loan and would likely need to pursue an open‑market bond sale for the roughly $19.75 million par amount identified in the presentation.

Kleinhens emphasized the town’s limited options: “If we can’t do these projects, we’ll sell to someplace like Citizens or Indianapolis. They’ll operate them and you can see what your rate [would be] and then we lose total control over that,” he said. He also said the council could use on‑hand cash to lower the rate slightly but warned that spending down reserves offers only modest per‑month relief and leaves the town exposed to unexpected failures.

Council members asked about alternatives and timing. The ordinance was introduced as the highest (upper bound) rate for a first reading; councilors may lower the rate before final adoption but cannot raise it after introduction, the consultant said. A public hearing on Ordinance 1423 is scheduled for the March 9 council meeting; the council indicated it expects bond and bid information in early March to refine the rate analysis.

What happens next: the council will receive construction bid results after the March 5 bid opening, hold the public hearing on March 9 and then decide whether to adopt the ordinance and proceed with a bond financing later in the spring.