CBU plans to dedicate more time toward replacing water mains with the funds generated from the rate increase.
(Courtesy: City of Bloomington)
Water rates are going up for Bloomington residents starting in early 2022.
The city council approved the City of Bloomington Utilities’ (CBU) proposal to raise water rates by about 18% for single and multi-family residences at its meeting Wednesday night.
CBU will increase the cost-of-service rates in two separate phases with the first beginning in 2022, and the second taking place in 2024.
"If you go long enough without doing a rate case, you get to the point where you start scavenging from other operations or simply not replacing things," said CBU director, Vic Kelson.
Kelson said the additional money will be put toward replacing old water mains and installing a new advanced water meter system to improve water quality.
"Currently, it’s underfunded. We have over 430 miles of pipe. We can replace about two miles a year. That’s more than a 200-year replacement schedule," Kelson said.
Kelson said one of the main goals is to increase what the city is spending on water main replacement. He said CBU currently spends about $1.7 million annually on replacing water mains, but it wants to increase that to $2 million per year in 2022 and to $3 million by 2025.
"Water pipe service life is typically about 75-100 years. We're trying to get to the point where we're on a 100-year replacement schedule," Kelson said.
Residential and multi-family customers will see a rate increase of about 18%, that equates to about $45 more for the year.
"The average Bloomington customer would see an increase of about $3.75 per month for their water bill," Kelson said.
But industrial and commercial outfits will see a larger increase. For example, Indiana University's water services will see a 40% increase.
IU Assistant Vice President for Energy Management and Utilities Keith Thompson said the university does not support the measure because it unfairly raises its rates. He said IU has invested millions of dollars over the years to improve its water system infrastructure.
"We do not want to continue to make these water system improvements and also pay a high CBU water infrastructure rate. We cannot do both," Thompson said.
Thompson said the university will be addressing its grievances with the Indiana Utility Regulatory Commission (IURC), which is the state body that approves rate increases.
In response to Thompson's concerns, Kelson said improvements to the university's infrastructure does not impact how the city supplies water to IU. He said CBU looks forward to having conversations with IU in the coming months before the rate hike is put before the IURC.
"It's part of the process. I certainly wouldn't criticize any of our large customers for wanting to have their own separate opinion on the allocation," Kelson said.
Kelson said the IURC is expected to rule on the measure by the end of 2021.
City council unanimously passed the rate increase in hopes of making water bills more equitable for residents, while fixing some of CBU's infrastructure moving forward.
"It seems to me that IU has been benefitting from a rate structure in the past that has transferred costs per unit mostly to residents," councilmember Dave Rollo said. "And so, evening that for equity obviously makes it more for IU at this point, but this is a better situation for residences."
The community can expect to see the rate difference on their water bills by early 2022, pending approval from the state.
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