The Town of Winamac continues to prepare for a possible sewer rate increase.
Eric Walsh with accounting firm Umbaugh and Associates says the increase is needed before the town can start realizing potential savings by refinancing one of the Wastewater Department’s outstanding bonds,” he says. “If you refinance the debt, you have a lower debt service payment now, so that helps your debt service coverage, but we still calculate you’d be about five to six percent short on your rates. So you need, approximately, a six-percent rate adjustment, is out preliminary calculations. That would be about a $3.25 rate increase per month for an average residential customer.”
Walsh told the Winamac Town Council Monday that the town’s savings with the bond refinancing may be nearly double what he previously predicted, “The estimated annual savings is somewhere in the $40,000-to-$50,000 range. I tried to be conservative last week because I hadn’t run the numbers, so now that I’ve actually put pen to paper, I actually think you can get quite a bit more savings than we even talked about last week.”
Over the next 12 years, those savings could add up to a total of around $500,000. In addition to letting the bond refinancing move ahead, the proposed rate hike would also help cover the cost of bringing the town’s facilities into compliance with new ammonia limits, as well as other planned improvements.
Council members voted Monday to proceed with the bond refinancing and recommended a one-time sewer rate increase of six-percent. A rate ordinance is expected to be introduced next month, while an official decision would be made in July. If the process moves along according to plan, the bond refinancing could be complete by the end of July.