City Utilities customers will see their bills increase starting Jan. 1 as they begin paying a new fee for fire protection infrastructure such as hydrants and oversized water mains.
City Council members voted unanimously Tuesday to approve the new fee, which moves the cost of fire hydrant maintenance from property taxes to utility bills. The change will free up about $3.5.million in property taxes to be spent on other things, a move officials say is critical because property taxes are now capped.
The new fee will also address the problem in Aboite Township, long bemoaned by Councilman Mitch Harper, R-4th, where residents pay for fire protection infrastructure through their city property taxes even though the water system and its fire hydrants are provided and maintained by Aqua Indiana. Aqua includes the cost in its monthly bills, so city residents pay twice.
The city's Len Poehler said it makes much more sense to pay for fire protection infrastructure through utility bills, and that while firefighters and fire trucks are much more visible, the oversized water mains and pumps that hydrants require is no less expensive. He has said a typical residential street of 100 homes could easily be served by a 3-inch water main, but to provide adequate fire protection requires an 8-inch main. That raises the cost from $220,000 to $390,000.
Poehler also pointed out that non-profits such as hospitals and colleges, which are exempt from property taxes, will now be paying for the fire protection they enjoy through the fees on their water bills.
The package approved Tuesday also adjusts next year's water rate increase due to a settlement that demanded a study of the actual cost of providing service.
Rates increased 19.62.percent on Jan. 1, raising the bill for a typical household from $17.24 a month to $20.60. They were to increase to $21.78 in 2014, but the cost of service study shows they need to be slightly higher. If approved by state regulators, they will rise 9 cents higher than planned. The study also calls for adjusting the 2015 increase upward, to $23.11 from $23.06.
The council also approved a $373,000 contract between City Utilities and The Secant Group, which City Utilities wanted to hire for on-call engineering services. The consulting firm, headed by former City Utilities employee Ted Nitza, has been heavily involved for years in the purchase of the northern Aqua Indiana utility and the city's efforts to purchase Aqua Indiana's utility in southwest Fort Wayne.
But three weeks ago, Harper pointed out that the secretary of state's online records showed the entity was administratively dissolved in 2008. That issue has since been resolved, but Tuesday Harper found new points of contention, including 25 instances of unpaid taxes. Nitza said the tax issues were caused by an attempt to change the company from a limited liability corporation to a corporation and have been resolved.
When Harper alleged Nitza and his wife are claiming homestead exemptions on two different homes, committee chairman John Shoaff, D-at large, said the discussion had strayed from the merits of the proposed contract and cut it off. The council then voted 7-2 in favor of the agreement, with Harper and Russ Jehl, R-2nd, voting "no."