Town Council - Regular Meeting

I'd like to call to order the town of Newberg Spurs bond hearing. Public hearing to order, please. I'd like a roll call. District one, Steve Shoemaker, present. District two, Paul Perry, present. District three, Stacy Kger, present. District four, Ann restaurant, here. Council at large, Lyanna K. Hughes, here. Clerk treasurer Nanette Angel here. Town manager Chris Cook here. Deputy Town Manager Andrea Baloni is out. and town attorney Christopher Wisher here. All right. I'd like a motion for the opening of the public hearing regarding the town of Newberg sewer bond. So moved. Do I have a second? Second.

Do I have any discussion? All those in favor say I. I. All those opposed. All right. I'd like to start with um Baker Tilly. Chris. Yeah, I can. Uh [clears throat] well Doug Doug Baldiseri from Baker Tilly is here and he's going to go over the financial their financial uh analysis and what resulted in the rate schedule. Okay. Um, but I thought first, if it's okay, I would uh give a brief description on why

um and uh much of what I've got here is what I think Russell's previously provided to you, but I thought it would be good to go over some of it um for everyone else. Um and so there are really three main reasons for the rate increase. I'll start by saying I think I speak for everyone on this side of things on the town side and sewer department side and the council that no one here wants a rate increase or likes a rate increase and all of the folks here that including myself are going to have to you know pay the same rates. Um we've done the town has done a good job over the years of only um going through a rate increase when is needed and not doing one when it's not needed. But the town's also done a good job of doing them when they are needed as they're needed so as not to have to have large rate increases. Um so we have we have more periodic rate increases. There are really three drivers of this particular rate increase. The first and largest impact [clears throat] is the U project that is planned um and is uh will be bid soon which is a wet weather equalization tank and screening facility out at the wastewater treatment plant um to handle um the the tank is the current plant is hydraulically overloaded. Um the design maximum flow rate is around 19 million gallons a day uh or around 13,200 gallons per minute. And the plant is now receiving over 25 million gallons a day and 17,350 gallons a minute. So that is uh it's it's volume during large rain events that is coming in faster than the plant can currently handle it. This EQ basin

will allow um the tank will fill as the flow comes into the plant and hold it so that can be released into the plant more slowly and then the so so that the flow can be treated uh and will this one thing that this will do is alleviate the need for an immediate uh expansion of the wastewater treatment plant or delay expansion of the wastewater treatment plant. And this project is necessary as rainfalls become more intense. The project has become increasingly important to keep the system operating within state and federal regulations. Um the [clears throat] second and that project is all in. We're we haven't bid it out yet, but that that'll come in December, but expecting you know that to be a $35 million project. So is by far the largest reason the rate the rates will cover the debt service for a bond. uh to cover that cost. [clears throat] In addition, um the town has an asset management plan which is basically the plan for maintenance and repair of its existing assets. This is been something that the town has had in place for years uh through its funding, the requirement of its the bonds it has with the state revolving fund. This year, the state of Indiana le the legislature passed a new bill uh that requires an asset management plan and requires the town to have rates in place that will fund the asset management plan. The town has always done this, but this is now it is required by state law. Um and [clears throat] so part of the revenue requirements leading to the rate increase are to raise revenue for maintenance and replacement of current assets pursuant to the asset management plan. And the third reason is uh to cover increased operational costs. As with everything else, operational costs

have increased significantly since the last rate study and adjustment in 2020. Um some of that is related to um you know we we knew CO had an impact at the time. There's been uh regulatory changes that have required [clears throat] some some changes. Um but as just like anything else, costs go up. Uh and so part of the um rate will raise revenue for what continue to be increased operational costs. And Doug Baldesario with Baker Tilly will go through all of that and show you how that works into the analysis and forming the rates that the town needs to charge to raise the revenues to pay those expenses.

Okay. Um, and so, and I think Russell Pal from the Sewer Wastewater Treatment Facility is here. Do you have any questions along the way? I think he's a little under the weather, so his voice might be a little out, but he will do his best to answer any questions that you have or the public have. And, uh, I think now we'll hear Doug's going to go through the finances.

Good evening everyone. And as Chris said, I'm Doug Berry with Bakery and um um my team and I um put this rate study and financial analysis together. Um and we can go through the the high points of the rate study uh in a PowerPoint slide deck here for the group and the public to hear. Um but as Chris stated, the majority of the need for this rate adjustment is to pay for the project that's that's required and to keep up with asset management plan. So there is some operating increases um just like uh many utilities are seeing across the state and across the country that the you know the expenses have gone up since the last phase of the increase in 2023. Um you know those those main expenses that have gone up are are purchased power electric which um certainly is hitting folks down here chemicals um and those Those are your your major increases in your expenses that you know just have to be paid for in order to run your utility. So going through the slide deck um the the sewage works has a strong financial position and has for quite a while. The town has done a very good job as Chris said about doing small radical rate increases over time to not have huge rate burdens on the public. Um and u no one wants to raise rates but have a small rating is a good way to keep up and has a good rating and that uh makes it able to finance this project um and get good interest rates on bonds which s which saves for the payers money. Um, we talked about uh financing the project uh within with an open market bond issue is the plan, a 20-year bond issue um here in the spring to pay for this project so

we can move forward, cover the necessary expenses through 2028, which is the period we're going to have to project through in order to market the bonds and sell them and get a good rating. Um uh and we did phase these rates in over a three-year period uh to help reduce the burden on rate payers knowing that this is a a pretty good size project for the town and you know there is some rate impact. Um and then you'll really do what we can to keep the rates affordable for for your customers. So the project we're looking at financing is $41,300,000. Um And this is the EQ basin project um for the estimated construction costs, contingencies, issuance costs, and other non-destruction costs like engineering and all that. So um yeah, all in that's that's the bond issue that we're planning on financing that is built into the projected rates. Here's a look at your overall combined debt service after the issuance of the $41 million bond. We're right now we're anticipating having that structured as a level bond issue uh for 20 years with interest only for two years, ramping that debt service up again to help those rates ease the ease the burden on rateayers. As you can see, that ramps up in the first couple years and then it builds up to your total debt service of about 7 million a year and that stays level through 2041 until it roll that pays off and it drops off a little bit there. But that's what your debt structure is looks like for this bond issue. looking at the overall revenue requirements for the sewage works. Um phase one rates [cough] effect in in here in 2026 um with phase 2 and 27 and phase three

in 2028. Um we looked at um our test year for the period was um uh we looked at calendar year 24 and also adjusted for the expenses through June of 2025 to get current expenses and then we projected what the payroll is going to be with with some additional employees and and pay adjustments along with all the other projected revenues and other expenses. So you can see your total expenses are about 8.8 8 million uh for 2026 uh 9.2 million in 27 and phase 3 is 9.7 million. Um as those increases expenses do increase over time.

Um there was a a minor Can I ask a question? Um are we doing questions? We're going to do questions later. Well, but as you go through these slides, [clears throat] can't we ask a question on the slide as to why? What projects like the operating expenses? What methodologies are you using? Th those questions will be in the public comment after Doug's done his presentation. Then during public comment, you could ask Why didn't you hand out a PowerPoint to us so we can have something? Sir, you're you're you're with all due respect, like I said, Doug's going to complete his presentation and then the public can speak. And are you going to give us a copy of that so we got something to base our questions on? You want my copy?

We have We have copies of the Do we have copies? Yeah, there's also a more detailed study that that lays out the details of the expense increases. I mean, I'm sure that's available. Sure, it's available with the town. It could be provided.

Yeah. Um, we we've been um, you know, we'll continue on here, but we've been doing rate studies, Baker Tilly has, for over 25 years, and I've worked for the town for a long time. We do regulated work and town work. So I can say that these expenses were based on a test year adjusted to projected just like we would do for any grade study u with allowances for increases. So there is a a a very good cost basis for these expenses and the other revenue requirements for the basis of the rate increases. So, uh there is an increase in payment of taxes due to the um uh adding the project an additional payment of tax from from the uh from the project. And then you can see the debt service how that ramps up also to help again phase in those rates um based on the debt service schedule that slide that we just looked at where it ramps up from 5.4 4 million in 26 to 5.7 27 then goes up to the total projected amount of 7.2 million um in 2028. And then there is a debt service reserve that's required whenever you issue a revenue bond you have to fund the debt service reserve equal to one year's payment and that's required over five years. So we built that in um at a partial year in 26 and then the full amount of 628,000 per year to fund that reserve which is required for revenue bonds. And then our replacements and improvements based on uh depreciation expense and and um that has been reduced to an amount for required debt service coverage and to cover the asset management plan. uh capital expenses. This is a large sewer utility. There are there is certainly

some older infrastructure that needs to be needs to be updated along with other um just keeping up with everything at the plant uh and other assets. So, um we have built in the replacements and improvements amount um that also ramping up from 1.9 million up to 2.9 million in the third phase. Um, and that provides for that those replacements of those assets and provides uh the coverage that you need um in order to market these bonds and get the rating you need to actually sell them. And then we have return on investment which has been a revenue requirement for the for the town for for many years. uh and certainly you can have a return on your investment especially when such a large portion of your um customer base is outside of town and you're taking that risk and serving those folks. So overall the revenue requirements for for phase one are 17.7 million phase 2 that ramps up to 19.6 and phase three to 21.8 when we compare that to the available revenues for 2025 and I will say in our revenues we've assumed the allowance for growth this is a growing system and um there there will be increases in um just normally from those customers being added on and we we've added in an allowance for growth to help reduce the rate increases again um and um so when comparing uh the revenue requirements to the re the actual revenues available. That does result in about an 11% increase per year for the three for the three years. So that's what we're looking at from a revenue requirement standpoint point and from the from the adjustments. So what are we looking at from um to be able to finance this project to cover all the revenue requirements of the of the sewage works? Um,

we're looking at currently the present rates, minimum rate inside of town is $446 per month. That will ramp up to $48.97 for phase 1,54.444 for phase 2, and $60.62 for phase 3 in 2028. Um for the minimum residential monthly bill outside of town um that bill currently 6224 that'll go to 6919 7691 in phase 2 and 8561 in phase three. Um the rate um the the rate adjustment that we did was across the board to all customers. So all customers will see the same percentage in adjustment to their rates um no matter what their usage is based on the percentage. So what's driving the rate impact and as uh uh or the what's driving the rate adjustment as Chris pointed out um you know there are four main buckets we have here. Here we have your operating expenses and and obviously just like other utilities across the country. We've seen uh you know operating expenses going up especially some of the main ones that you have with with powerful and sludge removal actually is another big one that has gone up. It's got more expensive to take care of. Um but so about it's not 100% increase. I don't want people to get confused here. We do 100% of the total increase. So the the total adjustment for inside of town over the three phases will be $16.15 per 56 per month of that about $3 is from the increase in operating expenses and that's getting you all the way from your last rating adjustment which was 23 to 28. So that's a that's a 5year period. Uh and that equates to about $3.31

per month um over three phases. Um the pilot is um just a 50 cents increase. That's a very minor. And then you know you look at your replacements and your improvements in debt service. And you know I didn't say this earlier but you want your you want to have both rate funded replacements and improvements and debt funded. Um this is a large project. It would be um really difficult to fund it without issuing debt. It would cause significant rate increases much higher than we see here. Um, so but you do want to have a balance of paying for a good amount that you can from your rate so you don't issue more debt than you need to issue and over time it keeps your rates down. But you can see that a full 77% of total increase is due to capital improvements is due to this project and keeping up with the asset the aging assets of the system. So those are the rate increase drivers. Sorry, it's a little blurry, but um so how do um uh your bills compare to other communities? And and I will say every utility has a different um different um rate base, different requirements. So it's hard to compare, but people do like to see these. So we do compare you do compare with what your neighbors have. And you can see currently new inside of town is 4406. We show phase one here because I think it's unfair to show all the way to phase three when other il in the area might be raising their rates in in the coming years. Um so we show what you know what we're looking at next year going to 48.97. You can see they still compare very very well to surrounding communities around here uh utilities and what and what utility rate pay what they pay in those other utilities. So I can't I can't really read. What are what are we cheaper than? What communities around us are we cheaper than?

We're lower than Booneville, Evansville, Chandler, Fort Branch, okay? And we and we know there are rate increases coming in a lot a lot of these places. I mean there there may not be on the books yet or even advertising them. So you can't really they're you know, but we know for a fact, right? I know of several uh Evansvilles are always going up because they're dealing with that consent decree, right? Um and uh so this and as this hap I mean I think um Lynville just had a 60% rate increase. I mean it's very it's it's kind of everybody dealing with the same issue. So we are cheaper than most of our surrounding comm. Yeah.

There's a lot particularly your in town rate is very I mean that's a and your race farewell. Pretty fair, right?

And then looking at the outside of town, but there's fewer on here because not everyone has a separate outside of town, right? But um a lot of them do, including Evansville and Chandler and Mford. Um and you can see that those currently on the lower side of average and still staying there in the in the certainly in the um in the middle not not towards that high. So I think um both your inside and outside of town rates are are favorable when compared against other communities. And then the last page is just the present proposed rates where we increased all the rates across the board for those three. So with that I'd be uh happy to open it up to the public at this point. In a in a minute, I'm going to say something for us and ask for a an answer.

Can I ask say one thing real quick? Sure. Or just to just to make sure everybody understands because I think we we take this for granted because we see we live in it all the time. But as kind of Chris Cook says a lot, Newberg is a unicorn. And I think it's worth pointing out the dynamic that is the Newberg and Newberg sewer. The town is 3500 population. Well, less than 3,500 as we all know. uh 3,400 in population. I think there are 1500 households or sewer accounts in town. The sewer system serves a large portion of Ohio Township. There are well over 10,000 sewer accounts, customer accounts, including commercial, but it serves a population of somewhere near 40,000 people. So, it is a sizable system that's a lot, you know, well beyond just the [clears throat] town of Newberg. Um, and that's why you some of the numbers you see may be higher than you would expect for a small municipal utility. This is not a small municipal utility and it's a well-run municipal utility. Um, and that's evident in the numbers as well.

Absolutely. Okay. What I wanted to say was I've had a lot of feedback from people either stopping by my office, emails or texts saying that this rate increase and this project is not necessary. It's not urgent. It's not an emergency. What happens if we don't do it? Uh if if we don't do it, [clears throat] so right now we're pumping more water into the wastewater plant than it can handle. Okay. I think I don't think anybody can hear. Move your mic. Just get closer. Maybe he's [clears throat] wrestling. Oh, that's right. Do your best. I'll be sick tomorrow. [laughter]

So So we're pumping a whole lot more water into the wastewater plant than it can handle. Uh, so currently we we actually go in and we have to turn the pumps down so it doesn't pump into the plant too fast. Microphone. It is. Oh, he's he's [clears throat] maybe that one will work better. Yeah. Sorry [clears throat] about that. Can you hear me now? Yes. So, so we're pumping more waste water into the plant than it can handle. Currently, [clears throat] uh, and in large rain events, we have to manually turn the pumps down to keep it from overflowing in at the plant, which puts the households at risk. So, we have

And what do you mean by households at risk? So, if we if we don't dump it into the plant, it's staying in in the pipes and the systems. Okay. So, we have to monitor the all the pipes to make sure we don't back it up into the houses. Back up into the houses. Okay. So, so what this project will do, we're going to build a 4 millon tank at the plant so we can run the pumps full steam and have a place to store the water until the rain quits. Rain quits.

The plan is to pump it back into the plant once it can handle the flow to treat treat all the way water. You know, we've been the council has been tasked with or we've we've been criticized in the past for not maintaining what we have, not being proactive on getting things done and waiting until the last minute to do something. We're not doing that anymore. These are things that unfortunately have to be done. It is an increase. I don't like an increase, but it is better than having my sewage back up in all my bathtubs and toilets and my sinks. So,

right. And and this is a two-year event or a two-year project, too. Right. So, we're trying to get ahead of the ball game before it becomes an emergency. Okay. One one more quick thing to note, too, is the town is under a consent decree yet to this date. That stems back from I believe 2006.

What does that mean? It's a consent decree with the EPA. Um, so with that, the the town cannot have sanitary sewer overflows, which is sanitary sewer overflow is associated with sewage coming out of a manhole structure or backing up into your basement, your house. Um, so with that, the the town has recently just completed their last consent decree project from that 2006 agreement. And what you just said is being proactive versus reactive. One, being proactive is much more coste effective uh than being reactive being emergency expenses. And two is if that the city continue the town continues to have sanitary sewer overflows, then the EPA could have another agreed order implemented associated with this project. And if the EPA has additional mandates, um they're going to require the utility to have very strict schedules, uh manage projects, which becomes much more expensive. So the utility is doing this being proactive managing their system in order to comply with uh the current consent decree as well.

Okay. I have a list. Stacy, may I?

Sure. Of course. I'm the uh chairman of the utility committee and one of the things that has bothered me a great deal and why why I think we need to make take a long hard look at this project is because when we had the recent emergency at PBTT we could have had a really serious serious situation and with this holding EQ tank basin that we're going to put in we could bypass we could get water to the to the basin and hold it while we were waiting for it to be made safe by uh G given the all clear warning. So, it's a it's a danger situation as well as a capacity situation.

And I think what was asked Russell that what would happen if we didn't do it but right. So, if we don't if we don't do it, we'll [clears throat] overflow the wastewater treatment plant and EPA will

right come in. We have to have additional manh hours to try to manually pump to try to avoid overflows. But if we have, you know, we are on the cusp of, as Drew said, getting out of that consent decree, which has been in place since 2005, uh we're we've done everything that we need to do pursuant to that decree. But any further overflows or additional overflows or new overflows could trigger that whole process again and it could be worse and then we would lose control over how we do the improvements and when and maybe how much they cost because we'd be under an edict from the federal government. So we're being proactive and making sure we do it uh and stay compliant and don't end up in that situation. Um so I think that covers it.

Okay. Is there anybody else on council who'd like to make a statement before we open it up? Well, [laughter] when do we ever talk that I do not talk? Um, I'm Lanna Hughes and I serve uh under sea uh with the utility commission. I've been one that has kind of fought this from the beginning. None none of us want to increase this. Even Russell, the sewer plant director, kept me after school at the last meeting and said, "Are you going to be okay with this?" Well, no, I'm not. But what else do we do? We have been on top of the game since something happened 10 years ago. No, that was 20 years ago. Wow.

20 years ago. 20 years ago. Wow. So, we don't really have a choice. Whoever said to you, "Why are you doing this?" And it's not necessary. I hope they're here tonight to listen to this because it truly is necessary. I agree. What happened 20 years ago? [cough] I'm sorry.

Well, 20 years ago was when the town entered into a consent decree with EPA. Now, particularly along the river, a lot of utilities have been under consent decrees. we were early. Evansville's dealing with that now. You may see that. But that's about discharge, you know, overflows and discharges and particularly on the river. But um you know, since then a number of projects have been done uh to basically build into the system more protections and and and upsizing pipes and putting in new lift stations, other things like that to alleviate that. So, we're at the point now where we're we've done everything we need to do and we're in discussions to get out of the consent decree.

Basically, what it means is we now have been doing everything right for 20 years and have stayed clear for 20 years and we intend to keep doing that. Yeah. And to get out of a consent agree with the EPA is a big deal.

And just because we get out of it doesn't mean we can start overflowing sewers either. we have to stay, you know, we have to stay within the guidelines. It doesn't mean we're free to just do whatever we want. So, I don't want to give that impression, right? We still we still, the town intends to continue to do its planning. It's proactive uh maintenance and repair. It's what we call SEOM, which is, you know, that plan that it that it has with EPA will continue because it's been good for the utility and good for uh I think the community that that's the way the utility has been run since then. Okay. Um, I will open it up for [clears throat] comments and we'll start just with people who signed up. Um, I'd like to remind you that it's a threeminut comment. I also would ask if you would have the same comment that the next person has that maybe we can consolidate comments and and don't repeat constantly. But the first one would be Lewis Ames.

You don't like being first. Well, that's right. You signed first, so you got it. Got here early. Good start. Uh, I'm at live account. Okay. I have basically two questions. I have no idea what these gentlemen have reported here. As we are, aren't they loud? Uh, I am assuming it's a 20-year bond. Is that what I heard? Yes. And what is the rate of pay on that? Well, rates are going down, but uh I think we assume a little over 4%.

Okay. I was curious of that. Okay. How many city and how many county accounts do you have? I'll have to leave that to you. We got that information. Roughly, 1500 over the week. How many? Roughly, 1500 in town and 11,000. Uh no, 10,000 out of town. Yeah, it's it's about 1,600 15 to600 into 9500 out of town. 9,500 out of town.

Well, I I know at some point in time you've had to explain this to someone and I must must have missed out on it, but how is it legal that the city of Newberg has a lower rate than people who live in the county? How is it legal? Yes. Okay. Has it ever been contested in I can uh I can answer that. Okay. So, could you speak up so everybody Yeah. Can everybody hear me? Okay. We could. So, you couldn't? No. That's first time anybody's ever said that the u

So, uh yeah, let me try to address that. I mean, legal um and it's not uncommon to have in town, out of town rates. And I guess the basic premise behind it is is that the in town the town is the the in town c in town customers are essentially the owners of the utility and pay taxes to the town and have some benefit from living in the town. Um, but from a legal standpoint in 2012, the the the in town out of town rate goes back, Doug and I talked about this earlier, we think to 2002, 2003, uh, or or thereabouts when certain major improvements were made out of town. Um, but in 2012, so the rate was created, it's been across the board increases since then. But in 2012, the state passed a law that um allowed the town to get required municipal utilities to go to the IURC and file their in town, out of town rates with the IURC for approval. It was not required that you make a case for them, just that you file them and get them approved. Those rates were approved in 2012. And so now, uh with the across the board increases each time, that differential has stayed the same. And it's perfect. It's legal and there's no requirement that we go back to the IURC unless we were to increase them by a certain amount.

So, you're saying that it doesn't matter what you decide you want to put in. There's no guidelines that they say, "No, this is out of balance." You if if uh they just say, "Well, if we increase it by more than 15%, we would have to go to the IURC and prove our case." Well,

that's that's the legal answer. With that being said, [snorts] if if this board or uh body of people is going to decide these rates and what's going to be going on and apparently the county people pay for 90% of it, I think we ought to have a board that is made up of nine members from the county and one member from the city. That way, no one is sitting out here going, "Once again, the city folks are getting a free ride off the backs of the county people, which by sending this out, that's what you said."

And what we said right here, it tells us that we're paying 66% more than the county people. I mean the city of people county is doing that. You know your base rate this first year runs from 1324 for in town to 1998 out of town. That is not a fair amount. Not even close. All right. Reality is the city should take as much responsibility as the county. we would red reduce the time frame from 20 years substantially.

Thank you. And I don't know what the city gets that we don't but somebody needs to put it out in plain plain language that we can understand the gentleman. I'm sure you know they're experts on what they're talking about. No one knows. No one has an idea what that is. And immediately the red flag goes up when you get this. That's Yeah. And that's the same notice that every time we've done a rate increase that goes out. It's the way it's been for 20 years. Go down any easier.

I think that right you don't that we don't need this work done. I'm absolutely [clears throat] con convinced that with the additional loads been going on there it is there is a truly a need. But I think it needs to be shared equally. Okay. It needs to be explained to the people instead of just saying this is what you got to swallow and you're going to enjoy it. Sir, thank you. Appreciate your comments. That's Chris.

I would like to ask legal a question. Don't based on what the gentleman just brought out. Don't I know that if something would happen and some kind of an adverse thing would happen, the town citizens are responsible for that, not the people out in the town. It's the town that's taking out the bonds. It's the town that's taking out the financing. It's the town that's responsible for all that. It's the town It's the town. Can I speak, sir? Sir, we're help. Sir, can I speak? So don't you know don't make yourself feel like you want to be a hero or ride a big white horse in here because it is everybody's responsibility. Thank you. Thank you. Thank you.

Thank you. And I do think that this body should be changed to reflect the county and the city. Otherwise, it's going to be the old song. Well, it's why even bother you people making the You've made your point. Thank you very much. All right, Alex Darty.

And when you come up, um, please state your name and your address. Alex Dy, 506 Sequoia Drive.

As a rateayer and someone who works in the civil construction industry, I do support the Do support the surprise rate increase. This is not just a financial adjustment is an advant investment in the health, safety, and the future of our community. Wastewater infrastructure systems throughout Indiana are aging and under strain. Neighborhood communities are already dealing with serious infrastructure challenges from emergency repairs that have disrupted daily commutes and require multi-million dollar fixes that redirect funds from program capital improvement projects. These challenges are something all communities face but should be taken as clear warning. When we delay necessary upgrades, the cost and risk multiply. These proposed improvements will prevent overflow, protect water quality, ensure compliance with environmental regulations. If we don't act now, we risk catastrophic failures that will cost far more to repair later. Adding to this urgency is the reality of construction economics. Since CO 19, material costs have skyrocketed and remain about 40% higher than pre prepandemic levels with no real signs of returning moment. Every year we wait, inflation, supply chain pressure make these projects more expensive. Acting now locks in costs before they climb further and save rate payers more money in the long run. This rate increase is not about burdening residents. is about protecting them from future crisis, environmental hazards, and significant emergency repair bills. Proactive investments today means reliable service, regulatory compliance, and a stronger foundation for future growth.

Thank you. Thank you, Ed Miltonberger.

Thank you. Ed Milberger, 9124 Hollston Circle. Uh, first of all, I wonder why the PowerPoint presentation didn't show what your actuals are for this year so we can get a good understanding of the increase in what's going up from today to next year. Okay. So, I'd like to have that printed out and have that out to all the folks real quick. Have what printed out? What your expenses are not? Do you want somebody to run up right now? Yeah. It's unfair that you don't show that on the sheet. You only show 26. Okay. So, what's the change right now? Okay. The next question I have is it sounds like we have an issue with maintenance. Is that what I'm hearing?

No. It cost money. Why is such a big emphasis on asset performance and improvement? So, what I'd like to know is do you folks use a computerized maintenance management system to take care of your maintenance? Yes. And what plan is that? Which plan? Yeah. SAP Oracle what is Novo. Who? No. No solutions. Okay. So, what are your replacement and improvements costs this year? I don't have those numbers there. See, we would like to know that next year it's going to be 1.97. What is it this year? That that information can be provided to you.

Well, why don't you provide it now? This is part of this whole discussion. Nobody argues that you need to improve things. Okay? Right? So the next question I have is [clears throat] relative to that same thing. Whatever your cost is today, we don't know. You would know. I bet you know off the top of your head. I do not know off the top of my head. I've got a close and you're in charge of that place. I've got a close number. Actually, I'm in charge of it. And you don't know what your cost is this year? I mean, I know what my cost is by ballpark, but I mean, we've got a big discussion. What is it relative to you? If you want to put your stuff in the form of an email, I will have it as part of this. I will have it to you by the end of the night. Sir, there's no Look, there's no

let no let me I want to say one thing for everybody. No, you're just let me say something for benefit of everyone.

You can have just watch the clock and we'll see how long it takes me. the uh [laughter] I lost my train of thought, but the point is there's no requirement that in a public hearing that we even engage in back and forth conversation or we answer questions. They're required to listen to the comments. And so we're trying to be helpful to answer questions, but I think to the extent that you're making demands of us, no, just listen, that's not going to be had. Okay. So, we're going to do the best we can, but if if it gets if it goes beyond what is reasonable, you just have to understand that they will accept your comments and then we can address them tomorrow.

You can't tell me what the cost change is from this year to next year, but you can tell me the cost goes up by 50% from 26 to 27. Is there a reason for that? He's had his three minutes. We don't have to respond. He can. Yeah, I think that I think that we if you have specific questions about specific line items, we can address that after the meeting at some point. You said that it's legal to charge us more in the county, but why do you charge us more in the county? Is there a reason for that? I think we've talked about that. You didn't talk about that. I think we I think we did 50% more.

So, let me explain. I mean, I don't want to get into a back and forth about that, but I think there's one point that needs to be recognized is, you know, I think that we hear from you and others, and I appreciate it about the I pay the out of town rate. I appreciate that. But we also hear from people in town and they wonder why are we when we're doing projects at Victoria or we're doing projects out at out um near Deaconist or we're doing you know all these other projects we've been doing for the consent decree. Why are my rates going up in Newberg to pay for all this growth out in the county? And understand that all of that growth is great out in the county but the town gets no tax money from any of that. They get no benefit from all that growth out in the county. But yet the town is expected to fund sewer improvements and provide improvements for growth out in the county. And so the in town folks get a break. And honestly, if you took away, let's say the break in the town for an in town customer is$25 or $30 and you took that away and made everybody pay $30 more a month, the out of town people like me are going to see a decrease of two or three dollars

a month. Okay? And that's because of the ratio of a 1500 to 9,500 people. And so we're really not talking about I mean I don't you know I just think that's there's a lot of reasons why but and we don't have to get into that right now. Happy to talk to you after the meeting. Okay. My my one suggestion that will be why don't you do what Booneville did years ago with oil crossing. Why don't you just annex? It's been it's been tried. It's been tried. We've tried. Very good question for another day. Because they tried that. We've tried that.

It's all It's been rejected every time we've tried it by the folks out there that don't want to be in town. And I understand that. So, okay. I'm not sure. Boil never asked for a vote. Yeah, there. Yeah, they did. So, went through the same process. Lee Mlen. Yes. Lee McFallen, 120 Driftwood Lane, Driftwood Park. I'm an in town user. Sorry. Sorry. You're fine. You're fine. You're fine.

My question is, and I think there was a slide up there for a few seconds. I would like to know, we've talked about a 35 million gallon equalization tank. 4 million. You get the bond. Four million gallons, $35 million. Okay. 35 million. If we could flip it, we might. And we have a bond for 41.3. Can somebody fill me in with the exact numbers between the 35? So that and 41.3, right?

Yeah. [clears throat] The 35 is and with contingencies and other costs is the project cost for the EQ basin. There is $5 million of additional uh money in there for other projects that are needed that aren't wouldn't be funded by regular revenues. So, there are some other sizable projects that are on the books that could be done while we're getting the financing. We get those projects done.

Uh it's also there's a cush that's a cushion there. We don't know what the bids are going to be. It's a volatile time with tariffs and everything else. It's hard to know what the costs are going to be. So, there will be some cushion there. But, that's essentially gets you to 40 million and then you have your bond costs. Okay. And then my other comment is um how much revenue will be generated each year for from current to the I think the 2028 above what is currently being brought in by the city. We we can we'll look at these and get that number for you here in a minute. Doug Doug probably has that's your revenue requirement, isn't it, Doug? I mean,

what additional revenue? Yeah, we can show that 5.4 million overall

increase. Okay. Um I may be in a minority here. Um, I don't like the fact that it's a rate increase, but I'm cognizant of the fact that if we don't take care of the city, the equipment we have and the facilities we have, these developers who want to develop subdivisions, apartment complexes, shopping centers, retirement centers are going to look in other counties. That's true. And I would rather have the growth in Warick County than in Vanderberg or Spencer. Thank you. Thank you. I appreciate that.

Aaron Spencer, is that it? Yeah.

I live at 877 Lincoln Avenue. Some days it's outer, some days it's not. [laughter] Uh so I'm a capital project engineer and been a chemical engineer for 25 years. What is the asset replacement value for all the assets that this unit has? Do you know that Doug? We have that number. It's in the financial report. What our asset value would be for the whole

No, I'm not I was asking I'm looking at Doug to see if he knows that or if we have that somewhere we can get to it easy. I can't remember the number of what our what the value what we show our asset value is total and that's what you're asking about everything we got right I mean yeah we have that because we've had to do it but I can't remember what the number is okay may not it wouldn't be in the it wouldn't be in the revenue statements but it would be in our asset plan you know that in our capital asset plan and we can pull that together so how much percentage do you dedicate towards run and maintain business towards your total asset value across the board. You mean operating expenses?

No, you run and maintain. So, you have to dedicate capital to repair your assets, reset them, buy new equipment, meet government regulations. How much do you spend in [clears throat] percentage? The the asset management plan is roughly $3 million a year. Okay. And we're we're going to be at 21 $21 million. a normal percentage for sewers about two and a half%.

Okay. So most [clears throat] private industry operates at around four. So when I look at across the board, I'm from Oklahoma. I'm not from here. I moved here three years ago, but I was spent two years in Lafayette working in I moved here during co when oil took a dive. But, uh, one thing I've noticed is when I compare what I paid all over the United States, because I've lived all over, I see a net cost that's higher. I paid 40% higher here than I paid in Oklahoma. I paid 35% more than I paid in Lafayette within the last couple years. I ran comparisons. So what I want to know is what am I getting additional here when let's say for Lafayette the water essentially goes to the same place and when I'm trying to compare out I'm trying to look at what's fair so I also looked at Louisville their discharge points about the same they always stack about 30 bucks per household average higher intel I can only imagine what the county people are paying. I realize property taxes will pay for part of that work, but I I want to know what infrastructure has been going on for the last 15 years that has driven that cost to everybody here to pay that burden higher than others have. When I look across the nation for similar aquifers, similar discharge points, what are we paying for? What what do we get additionally at versus elsewhere in the United States. What do we do? I'm asking.

Yeah, that's a good question. I mean, well, you want to answer it? EPA consent degree required us to do whatund and some million worth of product.

In in comparison, I lived in Broken Air, Oklahoma, city of 300,000 people. I paid more for water. If I live there today, my water incoming and my water out, which goes to a river, it's going to be under the same uh EPA mandates and Oklahoma EQ. It's the same. It actually discharges further. There's more lift stations in there. So, the operating cost is higher. Utility rates, they're about 10% lower, but overall, I don't see that that average household in town is 30. And I can only imagine how bad that an average household here is. So I'd like to know honestly what are we getting different than other parts of the United States?

I mean if if you look at if you look at the surrounding [clears throat] communities though I mean we're we're in line with the surrounding communities. I don't think it's because you say surrounding communities is a net we're we're comparable to them nationwide we suck. I'm It's a fair comment, but it's not one that we can really answer without knowing more about Oklahoma or wherever it is because because offer my email because I understand rates. Okay, if I can finish the u you know [clears throat]

it's different over in Henderson. I lived in Henderson, Russell Blues over there, but when I came over here years and years ago, it was more expensive over here. Why? Some of some of that could be um other revenues, tax revenues. A lot of utilities in other states, they may be funded in part by other revenues like taxes. So, they don't the rates aren't as high. Um it's it's impossible to know without really digging into it. Uh but we deal with what we have here, what our situation is here. And u that's all I can really answer to that. So, but I do I mean I think we all appreciate the questions and it's it's something that we hear from time to time. So, not discounting it. Thank you. It's unfair to compare a 300,000 community utilities.

There are advantage you have more customers spread than other. All right. Well, so I I work for I'm the cafe manager for I manage capital. When I look across the board and our water treatment, we have to treat like we're a very small. Our water treatment bill is less and we have to deal with all the chemicals and everything else that we produce that we I when I look at when I move here uh for example I look at so I would like to look at some point I'm sure like to know the cabin

proposal plan where you look at how much uh some of this work's going to cost because I'm going through it right now on the private side where I found that uh some of our labor rates are practically double. We brought other groups in from out of state. We've cut the bill in half. I've got a $27 million project I'm doing right now that we cut the labor rate by almost half because we went out of town. So, I would like to know when we go through these bidding processes, how far are we looking? Okay, sir. Thank Thank you for your comments. I think we've we've

we have a lot of people to go through, [cough and clears throat] so we're going to have to limit the back and forth. So, let's state our concern, state our uh positive or our negative, and we'll go on from there. Tom Slatz. My name is Tom Slatz. I live at 5881 Brianna Court. Um, we do something. Did you say we're building a 4 million tank? 4 million gallon. 4 million gallon tank. Yes, sir. What's the normal flow on a non rainy day? On a normal flow on a rainy day. On a non- rainy day, uh, around 4 million gallons. It is around 4 million.

Yes. So, we're Okay. So we're building a tank basically holds a base for it. Um so we can treat how much we we can treat uh the m max flow through the plant is is designed for 19.2 I believe 19.2 2 million [clears throat] 4 million was the non- rainy. So the rainy is what million gallons a day for a non rainy day. Yeah. And the plant can treat 19 million

19 hydraulically. The design average flow is 7.2 or 7.36. I I guess I guess that I'm not fully understanding. Uh so on a on a on a non non rainy day you're blowing about 4 million. Yes. On a hard and I hard grain is kind of you know. So So what you're telling me then is the plant can hold can handle 17 million and that's not enough on a hard rainy day. Correct. Okay. What are we doing to decrease the amount of infiltration?

We we've been doing smoke testing. Yeah. Smoke testing, uh, die testing. Are we making progress? Yes. And that's been going on for years. I mean, we're constantly working on INI, right? Infiltration constantly. It's it's but but it only does so much. And I'm [clears throat] going to say again, we got to limit We're never going to get out of here. We have to limit the back and forth, the questions. This isn't a a hearing or a trial. It's it's a it's a public hearing. So, if everyone could state your concerns, simple questions we may be able to answer, but these kinds of questions I think are beyond what we need to do.

I have another question based on on water usage. I'm a single guy. My sewer bill every month is exactly the same because I never make minimum. So that means not only do I pay out of town uh sewer rates, I'm paying a disproportionate share because I'm never approaching my minimum charges. How is that set? How is that is that comparable? Because my sewer bill, like I said, I never make minimum. So I'm paying is I'm paying not only do I have to pay 50% more because I'm out of I'm out of town. I'm paying another third more because I never make minimum and I have to pay minimum.

Right. Well, we can we want to address do we want to address questions now or do we want to wait till the end and address any questions? I'd say wait till the end. I mean, I think that we can do that. I'll try to keep note here, but So, Doug Doug, I'm sure Doug afterwards can address the minimum charge. Mark Frederick.

Good evening. My name is Mark Frederick. Sorry. It's my heart pacemaker. [laughter] I live at 4177.

Um the reason why I'm here tonight is um I'm against this rate increase. Um bear with me. I have TBI. a little bit slow. Um, I think you guys are all really nice people. Okay? You know, thank you. This is a great town. Um, but this is kind of like the center point meeting that I went to. I went there. There was like a thousand people and I spoke. Not to be self vanity or anything like that, but the reality check is that I already know you guys in your mind, you're going to let this go through. Doesn't matter what all the people are going to say to you tonight. There's nothing to convince you to prevent it from not going through. It will go through. I disagree. Okay. We live in a mini berry. Um I don't think it's fair for me to flush my toilet and pay $110 a month and for it to go up to 200 bucks a month. Um is it important? Of course it is to each and every one of you. But I already know that my conviction is that you guys are just going to pass it through. All these people have valid reasons for not to for it not to go up. For me, it's health. I'm a disability. Other people might have health problems. I'm not here. I'm not a busy savvy person. I do have an MBA, but you know, I my life has changed. But again, let's go back to what what this is. This affects everybody. Newberg is a pretty nice place. There's a lot of people here in Newberg that are very, very affluent. They could care less about this rate increase. It's a blink of an eye, petty cash. Okay, for me, I don't fit that category. But again, it's it's disheartening that yes, you guys work hard. Having this project would be nice, okay? But right now, everything's going just fine in the end. the water flows. You

guys have a budget. You're all getting your paychecks. You're getting pay raises. You know, I mean, do we want this? Yes, it would be nice. I would love to have a lot of things upgraded or whatever you want to call it. But I just I'm here tonight because I know you're just going to let me go through it. And that's what really hurts me because um New Rig is a great place. You guys are nice people, but it's just I'm sitting wasting my time. These people are wasting their time, too. Please take the direction and the leadership for it not to go through. Maybe peacemeal it somehow, whatever that means. Um, by letting go through, a lot of contractors going to make a lot of money, which is good. Okay. But, you know, we're trying to just make it happen right away. And you, you know, it's getting bigger and that's nice. So, please don't let it go through

and I know it will go through but I please don't let it go through. Thank you. Carrie Carrie Hive is it hide or head? All right. Rhonda Ward. Steve Stanfeld. [clears throat] Good evening.

Steve Stanill, 433, chair of the Lust Court in Newberg in the county. Um, I was distressed to to see the notice come through and notice that there was a basically an 11% a year increase almost 11 and a half% in the third year uh for this proposed increase and I understand that there are capital expenses and so forth that have to be done but u I there are a couple of things that I heard tonight that that concern me. Uh the first is is that is is that there is an expected rate of return out of the sewer system from the people in the county. Um, I'm not sure that feels right. Um, I'm not sure how what that amount is or or whether that is a substantial amount or an inconsequential amount, but it feels I I guess I'm an old country boy. I grew up in a in a community that had a um rural electric cooperative, and I really like the idea of customers owning the utility. um that seems to work a little bit better for everybody. I also went out and uh and found a study on the internet, ironically enough, from from Bigger Tilly u on on rates. Uh the most recent report I could find was in 2020, but the average in Indiana, not in our area, but in Indiana for a 3,000galon service was 37.45, which puts us quite a bit more than that. Yes, there has been a couple of inter intervening years, but um the rate increases requested have considerably exceeded the rate of

inflation for the last six or seven years and um I I feel that that needs to be addressed somehow. There are two ways to handle that. Obviously, you can go hand in hand to u your rateayers and ask for more money or you can use technology and some creative um um work to reduce expenses. I think we've done too little of that. The other question that I had associated with this is um we've always had rain. This is the temperate rainforest after all, right? Um and so is the is the lack of capacity that we're addressing at this point associated with growth in the county, growth in the town? Where are we getting the additional the fluent? I'd like that to I'd like a question answer there.

It's going to be so [clears throat] it's a combination. I mean the growth in the county has been tremendous as you know. uh you know the Epworth area u all on 66 I mean I've been here 20 years 66 was two lane highway when I started so most of the growth has been in the county not sure the actual numbers of tap so but

there's really been only in the in town was mentioned annexation [clears throat] was mentioned I mean with the town you know pretty much hemmed in into its boundaries there's very you know other than uh you know in the last few years driftwood subdivision and Riverstone subdivision out on the west side. Very little growth uh in town uh but a lot of growth in out of town. Commercial growth in like the wellness trail corridor and all of that up road and then residential growth's been booming since 2018 2019 out at in the Victoria area with the JGO homes and everything. So, uh, a lot of what's been done over the last 10 years have been projects out of town and some of those are consent decree related and some of those just to handle growth. But that's that's uh I mean that's most of it's being driven out there.

Again, sort of the business guy in me says that that should actually increase our efficiencies, right? And I think it has. I think that I think that doesn't that doesn't tell the story about efficiencies. That's a That's a different story. Hi, Jeff Forbes. Okay, thank you. Kitty.

Hello. My name is Kitty Taylor. I live at 101 [laughter] I live at 101 Plum Street and I am a representative of that area. Um, I'm here. I I wanted to be numb that I understand that um with time and with the current time where climates are changing, we're having a lot more water flow coming through, a lot more rain, um we're slowly becoming more and more um wetter. I would want to say talking to my brother who does work up [snorts] in Washington DC and how we have been labeled by many um higher government organizations as a sacri sacrifice zone because of the amount of climate change that is happening in the area. I am happy that we are looking at how to upgrade our water systems. Plum Street is getting flooded almost every time it does rain. we've come talked about it a lot of times. So to see this moving along does give me a little bit of um sort of it calms my nerves a little bit especially since a lot of the people there do live on fixed incomes and can't keep replacing water heaters. They can't keep pumping out their basement. So, I am happy to see that we are hopefully doing something to help replace and continue to help the infrastructure of our streets because it is causing a lot of problems um that have been going on for the last 20 or so years and I'm only 30 and I can remember all of this going on my whole life. What my concerns are of is just transparency. I understand it is a lot more labor to sit down and put um explaining where costs go. I couldn't really find it on the website, the town website, trying to figure out where all

these different costs are going. Uh having that slideshow was very helpful, but if we could have that more easily accessible just because I know not everybody is able to come out tonight and they may have more questions after watching this live stream that they can't have answered right away, but would like to email and have more information. Luckily, I was able to go see Chris today to a lot of my questions to hopefully take a lot of the load off um just so I could explain it to a lot of the residents over at Palum Street, my mother being one of them who has my grandfather um helped build up War County and was at the Simpson funeral home. So her having to see this for a very long time uh how our municiples have built up was very important to her. Another one of my questions is I'm looking at the 925 rate an hour admin costs. I'm just wondering for those admin costs, are they local people? Are they going to be people working in the system? Are they people overseas? When you say admin cost, it can mean a variable of things. And since I did go to college, I understand how much that variable can be,

right? I believe the admin costs are it's right here. It's not outsourced anywhere else. There's no it's all in this building or the plant where all that stuff's done and we'll have depending on how late this goes tonight by in the morning everything that's presented here and some of the stuff that's requested that's not there we'll we'll get it on site and we'll do a social post on it to get everything out. We wanted to get through the meeting and see what people requested and stuff like that. So that will be depending on when we leave tonight or first thing in the morning. Thank you.

Thanks, Kitty. Jim Renie. Okay. Tom Lawnberry. Long L. Thank you. Oh, that's an R and a G. Okay.

Thanks. Thanks for the time. Most of the questions been answered. I just have a quick question and this is based on the announcement that was put out by town of Newberg. There's a line in it that says the storage project will provide long-term cost benefits to the rateayers by implementing future expansion needs into the project. I'm certain what those expansion needs are, what the benefits will be, and if any future expansion needs, we'll also anticipate future rate increases. Just since that came up from you folks, I just wanted

when when the time comes. Um right now there's uh the headworks facility is incorporating the project. The headworks is a preliminary treatment component of it where there's screening for the trash floatables etc. And right now that's necessary to protect the the equalization tank to make sure the operations maintenance nobody has to get in there and clean it essentially. So, it's going to be expandable in the future where one screen is only implemented today, but there'll be room for additional screens to be installed as growth continues.

That's part of this project, not an additional cost to the pro in the future. I guess the additional screens would cost something when those are needed. But because of doing this project now and in and planning ahead and incorporating for future growth in this project, it'll make the future things that are needed to a large extent less expensive, right? Because we've we've laid the groundwork so that in this project they've used that opportunity to do that necessarily a a rate increase. Not necessarily. I mean, you know, at some point there may Yeah, there that's the the goal is to limit that or certainly not to the extent of this. Thank you, Don Break.

I appreciate your time. My questions haven't answered. All right. Thank you, Brent Cochran. See if I can I don't know. You got You got five seconds. You It's going to beep when it's done right now. That's about sitting in the back. Brent Cochran 7611 wide open court old hickory people. Um just a couple of uh comments with it and I haven't maybe the first is a question I hadn't seen addressed this third identity we've had in town out of town what is the unmetered water wellwater so if someone doesn't they're not if a if I would say primarily it's wellwater customers right

well using term on that is unmetered that is where water is furnished water furnished to unmetered residential [clears throat] what water is then furnished Well, that's a good question. I'd have to look at the language in it where they haul water to the Yeah, I think it's we're referencing that water is used that's not coming from a meter. It's not metered. So, that that's a flat rate that's basically based on a certain gallage that is charged to each uh like if you don't have a meter, if you're a wellwater customer, for some other reason you don't have a meter, you get a flat rate. The [clears throat] reason I'm The reason I'm bringing that up is unlike the gentleman that was single, I have a teenage son at home and so I would like to be an unbe. [laughter]

I know what you mean. And then and then the other thing on transparency as mentioned above the administrative costs I understand that there is that elevation that's needed and I understand that there's calculation in order to get revenue but it is about 23 to 24% increase over this time and that's pretty high. Um it's not like an inflationary increase. So you're maybe trying to hide a little bit of some of the revenue stream that you're needing to get in administrative costs and it's otherwise if it's calculated differently than that may be able to be explained. Um other than that I appreciate Alex's comments that he made I agree with it. Thank you very much. Thank you

Ralph Milsaps. Relax fire court. I am disappointed in the way that presentation started out without comparisons to the previous year's cost. And it seemed to me like um a lot of the information on this bond issue was hidden as far as administrative costs and employee costs and that kind of thing. I agree with previous commenter that transparency is so important when we're getting ready to spend $40 million. And if we're only putting in a holding tank, why are we adding new employees just to put in a holding tank? I don't understand that. Between 23 and 24, we put in 300 new tap in the county and we charge $2,000 for each of those tap in. Imagine like some cities in Indiana if we charge $3,000 or if we decided today to charge $3,000 for those tapes that would make a reasonable amount of revenue to consider increasing those tap in

fees. And I don't know what the commercial tap in fees are. Say we increase those to take some of the burden off county people. Take some burden off city people. Those are just my suggestions for your consideration. Thank you. Thank you, Liz. I have my question. Okay. Thank you. I think that is all of the questions that we've had. We appreciate all the input. Council, do you have any questions?

I'd like a motion for the closing of the public hearing regarding the town of Newberg sewer bond. So moved. Do I have a second? I'll second. Do I have any discussion? All those in favor say I. I. I. All those opposed. I guess the only discussion is we thank you for coming. We appreciate it. And I tell you what, I we're going to take a 10-minute break before we start the regular counseling.