Be careful changing water rules

Be careful.

Redkey Town Council would be wise to heed those words as it considers changes to its water and wastewater ordinances.

Town council members — four of five have changed from last year after the November election and a resignation — have expressed an interest in making changes to the town’s water ordinance that was updated in 2019. Targets include changes to the policy for allowing adjustments for water leaks and making deposits refundable. Eliminating sewer inspection fees and discontinuing sewage charges for residents who fill their pools have also been discussed.

Council’s desire to provide financial relief to town residents is admirable. But that effort must be balanced with the town’s need to pay its own bills.

Redkey simply cannot give away water. In fact, this has become a directive from the state.

Indiana Finance Authority found that in 2015 that the state’s utilities produced more than 50 billion gallons of water that did not generate revenue. That, it said, accounted for a loss of $54.6 million.

For that reason, such utilities, including Redkey, are required to complete a water loss audit and turn it into the state beginning this year. (Originally due in August, the date was moved to Jan. 1 because of the coronavirus pandemic.)

There’s a reason that the town’s 2020 board, with Doug Stanley pushing the issue, wanted to update the ordinance.

During a public hearing in May 2019, clerk-treasurer Debbie James pointed out that the town’s water fund balance was in the negative. At that time, the town’s water rate had gone a decade without being increased.

Before making any changes, the board should take a step back.

It should heed the advice of Randy Young, who runs the water department, James, who handles Redkey's finances, and town attorney Wes Schemenaur, who cautioned the board and pointed out that the state has strict requirements for charging and accounting for water usage.

“We spent a lot of time on that (ordinance) and I would just encourage you to look through all of that,” Schemenaur said. “Your water department is really unlike the rest of your city government; it’s a business and you’re providing a service to your customers.”

If council wants to seriously explore changes, it should consider hiring a consultant to do a water rate study. (In March, Dunkirk contracted with consulting firm Baker Tilley for a similar study regarding a stormwater utility fee.) That would help determine where water rates, and other charges, need to be in order to cover costs.

There’s no need to rush. Any changes should be made only after careful consideration and a review of the financial impact.

Taking a little time now could save the town from big financial challenges in the future. — R.C.