Company interested in utilities

A utility company has expressed interest in the possibility of purchasing Portland’s water and/or wastewater utilities.

Indiana American Water representatives visited Portland City Council on Monday to present initial information about the possibility of purchasing and taking over operation of its water department, wastewater department, or both.

Justin Schneider, director of consumer affairs for Indiana American Water, explained that the company, a subsidiary of American Water Works, serves more than 1.3 million customers in Indiana. (It provides water service in Winchester and Muncie.)

The potential benefit to a municipality selling its utilities to Indiana American Water, Schneider said, is that it removes the pressure that can be created when large infrastructure expenditures are needed. The company, he added, invests $100 million annually in infrastructure in Indiana. Because of its size, it can source equipment and materials less expensively than a small municipality can, added director of operations Wade Amos. The company also spreads the cost of its infrastructure upgrades across its customer base, which is intended to eliminate the need for large rate increases to cover the costs of major projects.

Addressing water rates, Schneider noted that Indiana American Water is regulated by Indiana Utility Regulatory Commission but acknowledged they are likely to increase.

“The rates in Portland are low,” he said. “It does not appear that the rates will be able to fund the capital needs that the community has long-term.”

City council in 2017 approved a series of four annual sewage rate increases — $5.25 each per month — with the first going into effect in September 2017 and the second in 2018. It has since delayed the other increases because it determined they were not yet needed.

The city’s water rates have not been increased since 2004.

A review of the financial status of Portland’s wastewater and water utilities by consulting firm Baker Tilly in June showed rate increases will be likely to cover the costs of required infrastructure upgrades. The city has about $15 million in projects for its wastewater treatment plant that are required through its long-term control agreement with Indiana Department of Environmental Management. Water department requirements are less costly, ranging from about $350,000 this year to $900,000 in 2024.

Schneider did not present any numbers for a potential purchase price or rates at Monday’s meeting, saying the next step in the process would be to have an appraisal conducted — Indiana American Water would pay for the appraisal — and for the city and the company to share information to allow both sides to analyze whether a purchase would make sense.

Council members, city employees and residents raised a variety of questions about a potential purchase by Indiana American Water, including:

•Whether water rates would increase and to what amount. (Those numbers would be determined after the appraisal is complete and water rates are subject to approval by the Indiana Utility Regulatory Commission.)

•If the company would consider adding another water tower to provide expanded service capacity west of the city (All infrastructure would be evaluated to determine needs, Schneider said.)

•The length of experience the company has with operating water and wastewater utilities (It has been in business for 135 years with water utilities while it has begun to add wastewater utilities recently and has a smaller footprint in that area.)

•Whether the company can take steps to address flooding (It can only address issues related to the utility, which would not include stormwater.)

•How the company makes money (It is viewed as a long-term investment, Amos said.)

•If it would be responsible for the long-term control agreement with Indiana Department of Environmental Management (If it bought the wastewater utility, it would.)

•Whether employees in the billing department would remain on staff (Indiana American Water billing is consolidated, though Amos said local employees could be offered other positions, such as customer service, with the company.)

•How leaks are handled (The company would have a local team to handle such issues, including after hours.)

Portland clerk-treasurer Lori Phillips noted that percentages of some employee salaries are currently paid out of the water and wastewater funds, including the mayor, clerk-treasurer, board of works, council and city attorney.

Portland resident Ricky Brown spoke against selling the city’s utilities, repeatedly questioning city council members as to why such an option is being considered. Several council members responded that no decision has been made and that they were simply listening to a proposal and gathering information.

Council took no action regarding Indiana American Water.

Also Monday, council approved its $8.3-million budget on first reading. The budget includes $3.78 million in the general fund, $1.18 million in the motor vehicle highway fund, $1 million in the insurance surplus non-reverting fund and $372,005 in the park and recreation fund.

Phillips noted that the projected tax rate of $1.92 for 2022 would be the lowest in several years. The current rate is $2.08.

Council also briefly discussed the ongoing coronavirus pandemic after Golden asked whether the city is covered by a recent executive order from President Joe Biden that requires employees of large employers to either be vaccinated or undergo regular COVID-19 testing. Boggs said the rule applies only to cities with 100 or more employees, which does not include Portland.

McClung then suggested that the city offer a bonus for employees who are vaccinated or who get vaccinated. Boggs said the city needs to update its COVID-19 policy to ensure that it is being consistent and that a bonus or other incentive for vaccination could be included.

In other business:

•Several council members and Boggs, who formerly served as general manager of WPGW Radio, congratulated station owner, operator and broadcaster Rob Weaver on his election to the Indiana Sportswriters and Sportscasters Association Hall of Fame. The induction ceremony is scheduled for April.

•Council and the mayor addressed the proposed Meridian Street storm sewer project, with Boggs noting that the city did not receive two grants for which it had applied. The city plans to apply again for a grant through Indiana Office of Community and Rural Affairs. The city also plans to apply for a grant through Federal Emergency Management Agency. (The project is targeted for 2022, with Indiana Department of Transportation scheduled to pave the street in 2023.)

•Approved adding a crosswalk across Walnut Street connecting the Performing Arts Center and the new Hudson Center for the Visual Arts at the Jay County Campus of Arts Place. The ordinance will take effect once the sidewalk ramp on the south side of the street is made compliant with the Americans with Disabilities Act.

•Following a question from Brewster, Boggs said he would propose residential trick-or-treat times for the city at council’s next meeting on Oct. 4. (Jay County Chamber of Commerce’s Merchant Trick-or-Treat event in downtown Portland has been slated for 5 to 7 p.m. Oct. 29.) Council approved closing Walnut Street between Meridian and Commerce streets for Jay County’s Purdue Extension Office and Jay County 4-H to hold a trunk-or-treat in conjunction with the chamber of commerce event.