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City Raising Water Rates To Help Replace Aging Water Lines

Street crews work to repair a water main break in downtown Bloomington

Vic Kelson knew something was wrong from the start. 

“Oh, probably the first day,” said Kelson, the director of the City of Bloomington Utilities. “We had five the first day, and I think that started things off.” 

The five things they had were water main breaks around the city on February 20. Over the next five days, seven more water mains broke. 

The city traced the rash of breaks to an issue with the computer system at the Monroe Water Treatment Plant. A communications glitch in the system led to an operator activating too many pumps at once, causing water pressure to rise and fall rapidly over a short period of time. 

And in pipes that can be a century old, it can lead to breaks. Especially during the cold of winter. 

“The oldest ones are over 100 years old, 110 perhaps, maybe even more than that,” Kelson said. “In the past, we actually did find wooden pipes in some places that had had been previously installed. A lot of them are kind of in the 75- to 100-year-old range; about maybe between a fifth and a quarter of our pipes are more than 75 years old.” 

All those breaks led readers to ask City Limits if Bloomington had a plan to upgrade the entire city water pipe system. 

READ MORE: Rash Of Bloomington Water Main Breaks Could Be Blamed On Computer Issue

The city began doing just that in 2016, but it’s a slow process. 

Four hundred thirty miles of pipe need to be replaced. Under the current budget, only two miles of pipe can be replaced per year.  

“That's like a 215-year replacement cycle, so we're not replacing them fast enough,” Kelson said. “We want to get to a 100-year replacement schedule, because the normal service life for waterpipe is about 100 years.” 

The City of Bloomington Utilities currently spends $1.7 million annually on replacing water mains – a little more than 9% of its total budget.   

Last week, the city council approved a water rate hike that would allow CBU to increase the amount it dedicates to replacing water mains to $2 million next year and $3 million by 2025. 

“It's a sizable investment,” Kelson said. “As we go forward, it's going to be more like 10 or 15% will be just replacing pipe, for at least a while anyway. It's gonna take us 15 or 20 years to probably get through the worst of it. And then we just continue on going forward.” 

FROM 2019: Bloomington Sees Six Water Main Breaks In One Week

Kelson said CBU needs a 22.2% rate increase overall to cover the costs of water main replacement. The rate increase approved by the city council calls for an 18% increase for residential and multi-family customers and 40% increase for industrial and commercial customers. 

The increase for residents would equate to about $45 per year.  

For commercial entities, including Indiana University, it would be a lot more. 

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,” Thompson said. “We cannot do both.” 

Thompson said the university will address its grievances with the Indiana Utility Regulatory Commission, which is the state body that ultimately would approve or deny the rate increase. 

Kelson cited a cost of service study that details what each class of customer should be charged using industry standards set by the American Water Works Association. 

“The cost-of-service study shows that again, residential customers are subsidizing the other classes, especially irrigation,” Kelson said. “So, the rates we brought forward are intended to equalize things out for you, at the end of it, the wholesale customers, the commercial and industrial customers.” 

Dave Rollo is a member of the city council, which voted unanimously to pass the rate increase. 

“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,” 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 rate increase also will help with other capital expenditures – infrastructure repairs and upgrades at the water plant, renovations of the backup diesel generators and filters, among other items. 

“Believe it or not, it cost close to a million dollars to paint a water tank,” Kelson said. 

It’s the first of two cost-of-service rate increases planned by CBU. The second would go into effect 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," Kelson said. 

Kelson says the state is expected to rule on the rate increase by the end of this year. If approved, rate increases would begin to take effect early in 2022.

For now, the city is continuing under the policies established in 2016 to address the city’s water pipes.

“It's not really the kind of thing you can do in a rush. It took 100 years to build them, and it takes 100 years to fix them,” Kelson said. “So, what we do is we prioritize the portions of the system that are either most prone to breaks or most prone to poor water quality or other kinds of issues.”

And when that’s done, the city water pipes will be ready for the 22nd century.

Have a question? Ask City Limits:

Our community is changing, from closing businesses to traffic and road construction to affordable housing, and we see the impact of these changes all around us.

We want to know: What questions do you have about how the Bloomington of tomorrow will impact your work, your personal life, your community and your future?

Here’s how it works: You submit a question you’d like us to explore about how Bloomington has changed over the past few decades, what you want to see for the city in the future and how ties with IU continue to shape the community.  

So: What do you wonder about how Bloomington is changing and how it impacts your life?

Interested in an ongoing conversation how Bloomington is changing? Join our Facebook group!

Want to contact your legislators about an issue that matters to you? Find out how to contact your senators and member of Congress here.

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