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Posted on Sun. Apr. 21, 2013 - 12:01 am EDT

Nobody’s fretting sewer contract’s end

City Utilities and Huntertown remain optimistic for deal

FORT WAYNE — Time is running out for a deal between the city of Fort Wayne and Huntertown on sewer service.

Fort Wayne has provided wholesale sanitary sewer service to the town of about 5,000 since 1998; Huntertown’s sewer system collects wastewater, which then flows into a large interceptor pipe that carries it to Fort Wayne for treatment.

But the contract between the two communities, which gives Huntertown a 53 percent discount off Fort Wayne’s retail rates, expires April 27. In the three years since Huntertown announced it would leave the contract, there has been just one negotiation session, and that was in the last few weeks.

As of Friday afternoon, additional talks had not been scheduled, though officials were hoping to schedule meetings this week and next. Both sides, however, say that despite the acrimony, they are optimistic an agreement will be reached.

“We are involved in some negotiation. We have had one meeting and have not yet scheduled another, but plan to,” said Vince Heiny, president of the newly formed Huntertown Utilities Board. “They are honoring the contract, and I’m always optimistic and believe it’s certainly possible that we will extend the contract.”

Fort Wayne City Utilities Director Kumar Menon said that, by ordinance, the city is required to charge the retail rate starting April 28, but that does not mean Huntertown will have to pay it. Rather, Menon said, the city will bill the retail rate but let Huntertown continue to pay the wholesale rate as long as negotiations for a new contract continue. Once the new deal is signed, the two sides can settle up.

“We’re willing to sit down with Huntertown and talk about a modified deal,” Menon said. “People shouldn’t worry that our rates to them are going to skyrocket.”

Sewage overflows

The fear of skyrocketing rates is what has led to this point.

Three years ago, as the contract required, Huntertown notified Fort Wayne officials that when the agreement expired they would not be renewing it. Instead, the town’s leaders said, they would build their own sewage treatment plant.

They optioned property and developed plans – at times controversial with Huntertown residents – for an $11.2 million wastewater treatment plant, saying the town’s rapid growth and rising rates charged by Fort Wayne made going it alone the better option.

Huntertown officials also say Fort Wayne’s $250 million settlement with the federal government to stop sewage overflows into the rivers ensures rates will continue to rise, making Huntertown residents pay for Fort Wayne’s environmental problems.

“Any financial predictions are hard to make given all the variables. We can make some assumptions, though,” Heiny said. “In 2009, the City Utility rates went up dramatically – 85 percent. For the city to fix all of their (combined sewage overflow) issues is going to cost $250 million. That certainly means more rate increases.”

Because Fort Wayne’s sewers were built to carry both sanitary sewage and stormwater, they overflow and dump raw sewage into the rivers about 70 times a year.

The rate increase Heiny referenced, however, was spread over five years. The last increase of that five-year plan comes July 1, when rates increase 9 percent, or about $2.59 for the typical residence. Future increases, officials said, will be much smaller, and the city’s wholesale customers will be shielded from some of the increases.

Menon said increases related to the overflow-prevention projects will be largely limited to the cost of upgrades at the city’s treatment plant and allocated by the volume that wholesale customers use. While it would be unfair to ask other towns to pay for, say, interceptor sewers unrelated to them, he said, they should pay for their share of the treatment costs.

“We understand them not wanting to be a full partner in the combined-sewer overflow projects and not participating (financially) in the entire solution,” Menon said. “But they’re using the treatment plant the same as everyone else, and that’s the only portion we’re asking them to pay.”

Rates questioned

Much of the argument, for now, at least, is a moot point: The Indiana Department of Environmental Management turned down Huntertown’s request for a permit to build its own sewer plant. But Huntertown officials are still holding out hope.

“We will have to take a closer look at the rates and costs (of all scenarios) and hopefully we find the most cost-effective one for Huntertown,” Heiny said.

Fort Wayne officials say the most cost-effective scenario is staying connected to City Utilities. They say Huntertown’s estimates of Fort Wayne rates are badly flawed, that the town’s leaders are underestimating the cost of building and operating their own plant, and city officials don’t believe Huntertown’s plant would not harm the environment.

Huntertown officials circulated a document estimating that Fort Wayne’s rate increases would push the average Huntertown home’s monthly sewer bill to $73.62 this year and to $121.02 by 2022. Fort Wayne officials point out that the estimate uses Fort Wayne’s retail sewer price, rather than its wholesale price, making it wrong from the start. Further, they say its estimate of an 8.29 percent rate increase every year through 2025 is far too high.

Currently, Fort Wayne charges Huntertown the equivalent of about $22 for the average home. Huntertown’s charges on top of that have most families paying about $34.80 a month. By contrast, the average family in Fort Wayne pays $41.87 a month, leading Fort Wayne officials to wonder why Huntertown insists rates are too high and that the town is being treated unfairly.

Grabill and Ossian charge their customers $65.75 a month and $70.10 a month, respectively.

In 2011, Fort Wayne offered to guarantee wholesale rates that would hold any sewer rate increases to 3 percent or less a year for Huntertown customers for five years, if the town also committed to contracting wholesale drinking water service. Huntertown rejected the offer.

Willing to negotiate

Huntertown resident Dave Garman said town officials do not have the best interest of Huntertown residents at heart.

“Why in the world are we in the eleventh hour trying to get a deal done? The council has known since January that they are under appeal,” Garman said, obviously frustrated. They can’t support their own sewer fund, which is broke, they can’t afford to help support the park and they’ve wasted lots of money on attorneys and engineers,” he said.

The town is concerned with “beating” Fort Wayne and building a new multimillion-dollar sewer plant and has been consumed by the appeal and other interests, Garman said.

Regardless of the disputes – though many – both sides say they are willing to negotiate and believe an agreement will be found.

“Fort Wayne is willing and able to continue providing service,” Menon said. “We want to ensure Huntertown can grow and have affordable rates.”

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