Thorntown introduces bond ordinance, proposes 123% water rate hike to fund treatment-plant expansion

Thorntown — The Town of Thorntown’s council on Feb. 16 introduced ordinances to authorize waterworks revenue bonds and to set new water rates after engineers and a rate consultant said the town’s water treatment plant is near capacity and needs expansion.

Consulting engineers reported the town received three construction bids for the water-treatment expansion, with the low bid from Ottenweller Contracting at $4,162,000, about 7% above the engineer’s estimate. CDS Engineers’ Dan Cutshaw told the council the existing plant operates at about 150 gallons per minute (roughly 216,000 gallons a day) and is at about 80%–90% of its capacity; the proposed new plant is sized for 300 GPM (about 432,000 gallons per day) and is designed so two additional filters could be added later to increase capacity to roughly 900 GPM (about 1.3 million gallons per day).

“The plant has been maintained well, but the aeration is not working and filters have little media left,” Cutshaw said, adding that the plant currently has no Indiana Department of Environmental Management violations. He warned that some replacement equipment, particularly filters, could have 40–60 week lead times and described the bid documents as standard EJCDC form contracts that include bonds, change-order procedures and liquidated-damage provisions.

Rate consultant Jarrod Hall of Krohn & Associates presented a comprehensive rate study using 2025 figures and a funding plan that shows total uses of $5,152,000 (construction $4,162,000; engineering and inspection $756,200; grant administration $85,000; insurance and contingency $148,800). Proposed sources include $3,550,000 in waterworks revenue bonds (modeled at 20 years, 4.5% as an example), a $750,000 OCRA grant, and $852,000 in funds on hand, including prepaid capacity fees from the Arbor Homes subdivision.

Hall said the model requires a proposed water rate increase of 123.2% to support debt service, fund a required debt-service reserve (about $277,000), cover operating needs and maintain working capital. He told the council the goal is for the increase to remain sufficient for at least three to four years and that, based on the financing timetable, bond payments will begin on schedule and revenue must be collected before debt service begins.

At the meeting, several residents questioned the need for the expansion, asked whether grants had been fully pursued and requested that rate increases be phased in. Resident Justin Wright raised concerns about a proposed doubling of the hydrant fee and the absence of a clear statement of the 2,000-gallon minimum in the current ordinance; Krohn said the ordinance language could be revised to clarify the minimum. Resident Ethan Schilling asked about risk allocation in the contractor RFP and how substantial completion and change orders would be handled; engineers said those items are addressed in the EJCDC contract provisions.

Council President Dave Williams, who noted the project has been in development for some time and described planned work on a third well, said he shares residents’ dislike of a steep rate increase but that the town would need to make the financing work if the council moves forward. “I don’t like the rate increase anymore than those in attendance do,” Williams said, adding the project is necessary to ensure service for current and future customers.

Engineers and consultants said the town obtained an OCRA grant but did not rank well for SRF financing due to scoring criteria tied to emerging contamination issues; the lack of additional grant funding and the prepaid capacity fees from a recent subdivision reduced the borrowing need but still produced the large modeled rate increase.

The council introduced Ordinance 2026‑02, authorizing issuance of waterworks revenue bonds, and Ordinance 2026‑03, establishing water rates, as first readings; both ordinances were presented by bond counsel Sarah Correll of ICE Miller. The council scheduled a public hearing on water rates for March 2, 2026, when residents will have a formal opportunity to comment before the council considers adoption.

Council and utility officials noted key next steps include value engineering with the low bidder, finalizing bond terms, confirming equipment lead times, and posting ordinance language that spells out billing minimums and any adjustments to hydrant or fire-protection fees. The meeting record shows the council accepted minutes for Jan. 26 and Feb. 2, 2026, and adjourned at 8:28 PM.

What’s next: The council will hold a public hearing on the proposed water rates on March 2, 2026. Detailed bid documents, the rate study excerpts and presentation packet will be uploaded with the meeting minutes on the town’s website, per the clerk-treasurer’s note.