Huntingburg considering 8.9% water rate increase

The Huntingburg Common Council introduced an ordinance for an 8.9% water rate increase following a recommendation from the Utility Rate Advisory Board at Tuesday’s regular meeting.

The proposed increase represents approximately $3 per month for the average residential customer using 2,000 gallons monthly, bringing their bill from $33.32 to about $36.30.

Buzz Krohn of OW Krohn Associates, who prepared the rate analysis, told the advisory board the increase addresses inflation in operating expenses accumulated over four years since the last rate adjustment in 2022.

According to Krohn, cumulatively the 8.9% increase equates to about a 2.25% annual increase.

“I think it is pretty reasonable,” Krohn said about the increase. “We’re basically looking at just sort of an inflation adjustment.”

The rate study projects the city needs to generate $4.7 million in annual revenue requirements, while current rates produce slightly less than $4.3 million, creating a shortfall of approximately $375,000.

Water Superintendent Jerry Austin outlined major capital projects driving the need for additional revenue, including rehabilitation of three overhead water storage towers and upgrades to the water treatment plant.

The east water tower, built in 1966 and last refurbished in 2010, requires complete interior and exterior cleaning and painting at an estimated cost of $303,000. The project also includes bringing the 400,000-gallon tower up to current OSHA compliance standards.

“It doesn’t have handrails on the top of the tower,” Austin said about the tower built before OSHA existed. “In order to actually physically look in the tower, you climb out one hatch, flip another hatch over, and you’re on top of the bowl. There’s really nothing there to hold you on.”

The west tank, built in 1979 and refurbished in 2012, needs similar work estimated at $519,000, while the south tank built in 2003 requires approximately $438,000 in upgrades.

Austin explained that water towers should be cleaned every three years according to American Water Works Association standards, but the city’s towers haven’t been cleaned since 2010-2014.

“The longer the tanks sit without being cleaned on a regular basis, that’ll also depreciate the integrity of that tank with those solids sitting in the bottom,” Austin said.

The water treatment plant requires additional upgrades estimated at $456,000, including switching from chlorine to chloramine treatment and adding algaecide systems to address lake water quality issues during hot, dry summers.

Austin also noted that the city operates about 43 miles of water mains, some over 100 years old, requiring ongoing replacement at costs of $200,000 to $300,000 per block depending on location. Austin said the utility replaces four to five blocks annually.

The rate analysis shows the city saves money by producing its own water compared to purchasing exclusively from Patoka. Current production and purchase costs total about $970,000 annually, while purchasing 100% from Patoka would cost an additional $730,000.

The water utility is also paying off a bond issued in 2019 for capital improvements to the plant.

“We’re currently saving over $200,000 a year,” Krohn said. “And then after those bonds pay off, those savings jump up to about $730,000 a year.”

The city maintains a contract with Patoka Lake requiring minimum water purchases, with rates increasing if usage exceeds contracted amounts. The wholesale water cost tracking factor accounts for about 9.5 cents per hundred cubic feet of the proposed increase.

The rate study projects costs over three years, incorporating inflation for wage and salary components while maintaining fixed costs for debt service and other obligations.

The Utility Rate Advisory Board unanimously recommended the rate increase to the council after reviewing the analysis.

The council scheduled a public hearing for May 12, 2026, at 5:30 p.m. during the regular council meeting.

If approved following the public hearing, the new rates would take effect for the first full consumption period after adoption, likely beginning with June usage billed in July 2026.