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 Carthage Faces 126% Increase in Water Rate

October 31, 2007 - To help pay for major improvements to the town's water utility, the Carthage Town Council has agreed to raise the rates of the town's water utility customers for the second time in less than a year starting in December.

At the conclusion of a nearly two-hour public hearing Saturday morning at Carthage Town Hall, the council voted 5-1 to pass Ordinance F-2007. According to the ordinance, a 126-percent rate increase is needed to help pay for improvements to the town's water utility and its continued maintenance and operation.

With the passage of the rate increase, Carthage is just about set to begin a project that will provide several major improvements to the town's water utility. The town will have new water wells drilled in a new well field, a new water treatment facility and 150,000 gallon water tank will be installed, and improvements will be made to the town's water distribution system. An engineer who attended Saturday's hearing said work is expected to begin this January and be completed by January 2009.

The town obtained a grant in June from the state's Office of Community and Rural Affairs that will be worth between $500,000 and $525,000 to help pay for the project. Although the town has also received a $478,200 grant from the U.S. Dept. of Agriculture's Office of Rural Development, it still needs to borrow as much as $2.1 million to fund the improvements. The rate increases approved Saturday are to ensure the town has the money to pay back the principle and interest on a 40-year loan for the remaining funds.

While public attendance at Carthage Town Council meetings is often sparse, that was not the case Saturday morning. Fifteen minutes before the 9 a.m. public hearing began, the number of people gathered in the council's meeting room at Carthage Town Hall had already exceeded the available seating capacity.

"There's no easy solution for this," Council President Rick Bush told the standing-room-only crowd of more than 40 citizens as the hearing got underway. He said the council didn't want to raise rates, but had no choice if needed improvements to the town's 71-year-old water system are going to be made.

"Have you guys seen those pipes out there?" Bush asked during one point in the hearing "It's a mess. It's a quagmire. … It's pitiful." He also said that the town's water rates had been kept artificially low over the years.

Council member Tim Wehr agreed that the slated improvements are needed. He said the council and citizens of Carthage need to pay attention to what's happening in Rushville and Greenfield. If the town doesn't get its utilities in good working order, Wehr said it will be difficult to attract growth and development to Carthage.

Several members of the public who attended Saturday's hearing were critical of the rate increase. Of particular concern was the impact the increase will likely have on those who have limited incomes.

"You're going to driver every hardworking person out of this town," one man told the council. "You'll make it a ghost town."

Someone in the audience mentioned there may have been interest free loans available for the project through Rush/Shelby Energy. Bush replied that the information was being provided about eight years too late.

Council Vice President Wanda Henderson told those in attendance that the basic rate for water customers using 2,000 gallons of water or less a month would go up about $18. She noted that the substantial rate increase was needed because the town has less than 400 customers to share the burden of raising the money needed to cover the funds the town needs to borrow for the project, and that the town had lost it's largest water customer, the Smurfit-Stone paper mill.

"This has not been an easy time," Henderson said. "But it has to get done. It's not an easy decision." Chuck Todd, the council's attorney, told those attending Saturday's hearing that Carthage was not unique with respect to the need for the improvements to its water utility, or the manner in which the project is being funded. Following up on Henderson's comment about the paper mill, Todd said Smurfit-Stone had accounted for 18 percent of the town's water utility's revenues.

Bush said that there had been consideration given to not raising rates for customers who only use 2,000 gallons of water or less each month, the minimum amount for which the town charges customers. However, he said doing that would require a 139-percent increase for everyone else.

Henderson suggested the town ask all water utility customers who are able to do so to pay one dollar extra a month, or more if they're able. She said this money could be placed in a separate fund to help water customers having a hard time paying their bills.

Bush said he supports the town establishing some kind of policy to help those experiencing financial hardship. "We're all going to do what we can to help out," he said.

One citizen asked whether rates will be increased again. Bush told him that's something that is always an option for the town, but said the council has no intention of doing that at this time.

"I guess we need to do it," one woman said of the rate increase. "Even if we don't get any benefit from it, our grandchildren will." A man standing nearby, however, remarked that the grandchildren of the town's current residents likely won't live in Carthage.

One of the more heated exchanges came early in the hearing when town resident Doug Bostrom asked about money from earlier rate increases that was supposed to be set aside to help pay for the water project.

Bush and Wehr both replied that this money had been used to help pay for needed repairs and improvements that couldn't wait for the water project to begin, which Bostrom said was contrary to an ordinance approving a past rate increase.

"We're here to talk about the water project," Bush loudly told Bostrom. "We're not here to talk about politics."

The volume and tone of Bush's reply prompted another citizen to ask why he was getting so upset.

"I'm not getting upset, but he's trying to make this about politics," Bush said.

Council member Bill Armstrong was the only council member to vote against the rate increase. "I'm opposed to any … increase, period," he said when it came time to vote on the ordinance. "The project's cool. I just don't want to gouge a bunch of old people."

The council also voted 5-1, with Armstrong again dissenting, to pass ordinance G-2007, which has to do with the bond issue that will be needed to secure financing for the project. A resolution to ensure that the town has tax exempt status for purchases made with respect to the project was also passed, with this measure managing to get Armstrong's support.

"I'm in favor of anything that does away with taxes," said Armstrong.


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