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The Echo
Taylor University, Upland, IN
Saturday, June 22, 2024
The Echo

Upland doubles water rates

Addresses negative water balance

A new ordinance doubling water rates in Upland will officially take effect in May’s bill for April’s water usage. 

Alongside the 100% increase, Upland issued an additional ordinance to increase water and sewer rates by 3% annually.

Town of Upland leaders passed the decision in light of the town’s current balance in their Water Fund, which rested at negative $400,000 as of April 11. The recent ordinance will help the town address the negative balance and eventually upgrade, maintain and fix their water systems, Mary Fletcher, Upland Clerk Treasurer, said.

If the Town of Upland persists in its negative Water Fund balance, the state can take over the town’s utilities; Upland would not have any control over its water rates or maintenance. 

Will Hagen, Taylor University's vice president for strategy and chief of staff, said the University’s operational costs — such as water — are not completely covered by students. While the water rate increase will impact the University, it is only one in many factors that influence what they charge students, he said.

“If you were to go back and look at the rate increases that Taylor has had over the last few years and compare those to inflation, you'd see that inflation was always higher than what we charged students,” Hagen said. 

To address increased costs caused by inflation — such as the water rate increases — the University works to increase other sources of revenue such as funding through donors or re-evaluating how the work or service is provided. That way, they ensure they’re not making students cover these costs.

“We're really trying to keep the Taylor education as affordable and within reach for as many students as possible,” Hagen said.

In the past, Upland had not increased water rates to accommodate for inflation or other expenses. Current actions intend to commit the town to a more proactive approach instead of a reactionary method to the way they adjust water rates, Jonathan Perez, Upland Town Manager, said. 

The last time Upland had to double the sewer and water rates was in 1996. The goal then was to maintain the present situation instead of preparing for the future, Perez said.

“When they dealt with that 28 years ago, it was because they hadn't raised rates then for 30 years,” Perez said. “So in the last 60 years, historically, the administration of the town have done that twice — where they've waited almost 30-year windows, before they touched rates.”

Before the ordinance, the town had been subsidizing utilities through its General Fund to prolong the town from increasing water rates. While the General Fund had kept things afloat, it is not meant to prop up their utilities, preventing Upland from properly running the town, Perez and Fletcher said.

To ensure that Upland stood within the State Board of Accounts' current standards, the town council voted to raise the water rates, Fletcher said.

Decisions like this take over a year’s worth of research before the problem can be presented for a public conversation. That research helps the town make an informed decision to establish their stance, Perez said.

Had utilities been properly managed in the past instead of supported by the General Fund, Upland water rates would be in sync with inflation and, as a result, be the same as it is now, Fletcher said.

Other options would have been to sell their water system to a utility company to manage it for the town. However, Upland would still lose control over what their citizens would be paying — the town just intends to make enough money to maintain their systems, not profit from it, Fletcher said. 

While town council members had the option to raise rates over a 3- to 5-year period, they voted otherwise. A gradual rate increase would likely have left the Water Fund balance in the negative, Fletcher said. 

“The idea is we need to be working our way out of the hole and building up resources so that we can handle water breaks without having to borrow money within three years,” Michael Harbin, Upland town council member, said.

In the past, the State Board of Account rules had been more lenient in the way they let towns use their General Fund for such purposes. While today the State frowns on using the General Fund for utilities, that had not always been the case, Perez said.

Fletcher’s predecessor realized the town had been subsidizing its utilities through the General Fund. However, transitions in the clerk’s office made it difficult for the town to focus on these issues appropriately, Fletcher said.

In 2023, Upland experienced five water breaks due to aging systems. The breaks were fixed, though, the cost to fix them contributed to the water deficit.

Because of the state of the Water Fund, the town cannot currently afford to upgrade or maintain the systems accordingly , Fletcher said. 

The new ordinance intends to change that. 

“We are exploring [how] to try to carefully look at what we can do that's going to be the greatest benefit for everybody without hurting — recognizing that there's some things we're gonna have to do regardless,” Harbin said. “When we took that vote, my comment was, ‘Out of necessity we needed to raise that bill’ — not because we wanted to, but because we had to.”