One year ago, Seymour Mayor Matt Nicholson said city leaders would have to take a serious look at raising sewer and trash rates.
He mentioned the topic again briefly last month during the annual State of the City address.
Now, Nicholson is ready to do what he says won’t be popular but is “the right thing” for Seymour.
On Thursday, the Seymour Board of Public Works and Safety voted 3-0 to move forward with a proposal to increase sewer bills for all sewer ratepayers by 15.1% for the next two years for a total increase of 30.2%.
“This is not a tax increase,” Nicholson said. “This is a service paid for by users.”
If approved by the city council, the first phase increase would begin July 1 with the second coming July 1, 2022.
Based on the average use of 4,000 gallons of water, that means ratepayers within city limits will see a total increase of $8.32 per month, bringing a sewer bill from $27.56 to $35.88. The increase per phase is $4.16, putting the bill at $31.72 beginning July 1.
Those outside city limits will see their bill increase by $12.49 per month from $41.36 to $53.85. The rate increase per phase would be $6.25 for service outside city limits, so users would pay $47.61 beginning in July.
Also included in the plan is a $4 increase for trash collection. It too would be implemented over a two-year period, going up $2 in July and another $2 in July 2022. Currently, residents pay $3 a month for trash collection service.
Even with the rate hike to $7, Seymour’s trash collection fee remains lower than many surrounding communities, including Crothersville, which charges $12 a month, and Brownstown at $12.35 a month.
“Even after full implementation, we will be $5 less than other communities in Jackson County,” Nicholson said.
The last sewer rate increase in Seymour was in 2001, and the costs to provide sewer service and maintain the sewer collection system have continued to rise over the years, Nicholson said.
He also said cost of living has nearly doubled since the last rate increase.
“If we reach a certain threshold, the state can force an increase, and we will have no options for controlling how much and when,” he said. “They will make that decision.”
After 20 years, it’s rare for any expense not to go up, said board member Dave Earley, who also serves as president of the city council.
“Nobody likes having to pay more, but after 20 years, I don’t know of many things that have stayed the same,” he said. “It’s a necessary evil, and hopefully, if this passes, we will be good for a while.”
The amount of cash on hand in Seymour’s sewer utility fund has steadily decreased year after year, too, Nicholson said, making it very difficult to be able to issue a bond should there be another catastrophe like the department faced in 2016 when a water clarifier went down and had to be rebuilt for $3 million.
In an effort to save money and increase cash on hand, the board of works approved a resolution Thursday to refinance $9.3 million in outstanding sewer bonds issued in 2011 for the Third Street Sewer Project. That gives the city the opportunity to save more than $800,000 in interest payments, Nicholson said.
The rate increases are not a “forever solution” and will be evaluated annually to see if they need readjusted, he added.
“It probably should have been done years ago, but it has not,” Earley said.
It would have been nice if the city had implemented a 1% rate increase every year for 20 years so it wouldn’t be at the point of having to raise it so much at once, he added.
“And that’s something we’ll look into, but we still need to get caught up,” he said.
The timing of raising rates during a pandemic wasn’t ideal, either, Earley said.
“We’ve known this for years. It’s just we are to the point where we’ve just got to put our foot down,” he said.
On the positive side, the sewer rate increase will help fund a long-term capital plan, including major sewer projects and equipment along with providing $1 million annually for sewer extensions and replacements.
“Instead of being reactionary, we will be able to accomplish more replacements by having the financial security to plan ahead,” Nicholson said.
When it comes to trash fees, there hasn’t been an increase since they began around 2001 even though landfill fees and the cost of fuel and equipment for the Seymour Department of Public Works have continued to go up.
By raising the fee, Nicholson said it allows the city to move the service from being funded through tax dollars to ratepayers.
“This allows us to use tax dollars for other community improvements, like roadways,” he said. “We do a pretty good job as a community taking care of our roads, but this will free up roughly $400,000 over the course of the year to be able to put into other projects.”
Board member Jim Potts said he sees it as a positive that even when all is said and done, the city’s rates will still be lower than other areas.
“These are healthy low numbers as other areas around the country would look at this and laugh and say, ‘That’s ridiculously low,’” he said.
For a city to grow like Seymour, it’s going to have to review and adjust rates on a regular basis, he added.
“We’re in the right direction doing this now,” he said.
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Sewer rate increase proposal
Description;Current rate;Rate increase;Proposed rate;Rate increase per phase;Phase 1 July 2021;Phase 2 July 2022
Rate per 100 cubic feet in city;$4.19;$1.27;$5.46;$0.63;$4.82;$5.46
Rate per 100 cubic feet outside city limits;$6.29;$1.90;$8.19;$0.95;$7.24;$8.19
Within city limits at 4,000 gallons;$27.56;$8.32;$35.88;$4.16;$31.72;$35.88
Outside city limits at 4,000 gallons;$41.36;$12.49;$53.86;$6.25;$47.61;$53.86
Trash collection rate increase proposal
Current rate per month;Proposed rate per month
$3;$7
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What: Seymour City Council meeting
Where: 301-309 N. Chestnut St., Seymour
When: 7 p.m. March 22
On the agenda: Introduction and first reading of an ordinance to increase sewer and trash rates and to refinance $9.3 million in sewer works bonds issued in 2011 for the Third Street Sewer Project
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