Knox Utility Rate Hikes Approved

Knox Elected Officials
Knox Elected Officials

Water and sewer rate increases received the final approval of the Knox City Council Tuesday. That was in spite of the continued opposition of council member Tim Manns.

He said that with over a million dollars combined in the water and sewer funds and with that amount not dropping considerably over the last year, he doesn’t think the increases are needed. “I just don’t understand why we’re increasing these rates and making every citizen pay twenty bucks more a month,” he says. “Do we really need to do that? In my recommendation for all the City Council members and the mayor, why don’t we just go out and take a poll? Go ask thirty people what they think, give them the pros and cons, and show them the facts, and see what the people of Knox want to do.”

However, Mayor Dennis Estok pointed out that citizens had a chance to comment at Tuesday’s meeting during a public hearing, but no one showed up, “The poll was right here tonight. The poll has been for the last three meetings. If the public was concerned, how many out there in the public do we have right now? We have to have public hearings over this to give the people a chance to express their opinions. Nobody shows up until it’s too late and then they wonder why. The explanation why is right here in the public hearings.” Estok added that in the future, the city could better inform the public on these types of issues by holding town hall meetings with a more relaxed format, to reach residents who may not want to attend a formal council meeting.

To address Mann’s claim that the increases were unnecessary, Clerk-Treasurer Jeff Houston pointed out that Indiana Code requires the funds to be kept at a certain level. He says the water and sewer operating funds have both been losing money in the past year, “In Water Operating, there were several months that we actually ended the month in the red, which we are not supposed to do.”

Both the water and sewer rate increase ordinances passed, with Manns again being the only council member voting against them.

The new rates are based on a study conducted for the city by accounting firm Umbaugh and Associates. Umbaugh representative John Julien says that the new rates are also designed to meet the requirements of bond holders, “What we found is that the cash position that the utilities have been holding was below the promises that you’ve made to the bond holders. Both the water and the sewage works have a couple of million dollars of debt outstanding. Whenever you borrow money, you make certain promises to the bond holders that you’re going to do certain things. You’re going to make your payments every six months. To make sure that you can make your payments every six months, you keep your rates and charges at a level that keeps your cash positions above certain floors.”

Clerk-Treasurer Jeff Houston says the increases will likely take effect starting in April, with a second phase of the sewer rate increase planned for next year.