Jasper Common Council gives first approval to water rate increases

A Jasper household using 4,000 gallons of water a month would pay $12 more a month by 2029 under a plan that cleared its first council vote Oct. 21.

The increase would come in three steps: $7.84 in 2027, $2.06 in 2028 and $2.10 in 2029. Utilities General Manager Rob Young said 4,000 gallons fits a typical four-person household. He added that a retired couple averages about 2,700 to 3,000 gallons a month.

The Jasper Utility Service Board approved forwarding the rate increase to council at its Oct. 19 meeting after Young presented a rate study showing the water utility needs to replace aging mains and rebuild its cash reserves

Young said the rate study, completed by Baker Tilly, is based on an asset management plan Jasper started with Wessler Engineering in 2025. The plan looked at the water utility’s needs over 20 years, including aging water mains, aging treatment equipment and facilities, and technology and security upgrades.

Projects were ranked by how likely an asset is to fail and how much damage a failure would cause. Water mains were scored by age, material and break history, where records existed.

The first version of the plan called for about $2.6 million a year in improvements: about $500,000 for the treatment plant and about $2.1 million for distribution lines. Young called it “somewhat idealistic,” saying it listed everything the utility might do without regard to cost. Officials scaled it back to what they believed the utility could afford.

The resulting five-year capital plan totals about $7.19 million, or about $1.44 million a year. It assumes:

• a $1.1 million State Revolving Fund loan over 35 years for a planned 15th Street main replacement,
• forgivable SRF loans for lead service line assessment and identification,
• and a $1 million interdepartmental loan in 2028, after the existing U.S. 231 project loan is paid off.

Excluding loans, about $1.02 million a year would be paid for through rates.

The rates also cover repayment of about $6.07 million in loans from the city’s electric department. The five-year loans, at 2% interest, are scheduled to be paid off between December 2028 and June 2030. They paid for the U.S. 231 project, the Mill Street main replacement, the local match for the backup water supply project, cleaning and relining mains in the Skyline neighborhood, and the 13th and Dorbett Street project.

Those loans don’t include main replacements city crews did themselves, including on Brosmer Street and Fourth Street, and an ongoing project in the Genevieve Avenue area.

Young said industry guidance calls for replacing about 1% of water mains a year, which would cost Jasper about $1 million to $1.5 million annually. He told the council the city hasn’t historically averaged that, but has recently tried to catch up.

The study also aims to rebuild cash reserves, which Young said are about $1.3 million below Baker Tilly’s recommended level. That level is based on two months of operating expenses, a year of capital costs and other factors. Young said the utility has not consistently met it for several years. He said reserves let the utility respond to emergencies such as weather-related main breaks.

Council members asked about the utility’s finances, how Jasper compares with other cities and how often rates should be reviewed.

Mayor Ryan Craig said the city’s electric and gas utilities have lent money to the water department, but he wants the water utility “to be able to stand on its own two legs.” He said the city’s utilities’ finances are tight enough that a couple of hiccups could cause problems.

“Nobody wants to increase the rates on the water,” Craig said.

But with the number of water main breaks the city is dealing with (two announced Wednesday alone), he said the city needs to focus on infrastructure and the rate increase was the only way to do so.

Councilman Paul Lorey said he was comfortable with the roughly $2 increases planned for 2028 and 2029 but not with larger jumps like the $7.84 increase in 2027. He said smaller increases on a regular schedule are easier on residents than waiting years for a large one.

Young agreed, saying the longer a utility waits, the worse an increase looks. He noted the Indiana Municipal Power Agency, which supplies Jasper’s electricity, does a rate study every year. Council discussion indicated the last water rate increase was in 2023, and this was the first water rate study since then.

Asked whether the water utility should study rates every year, Young said a full study each year may not make financial sense, since Jasper hires outside firms for the work. He said the utility should at least review its costs every year, comparing what the study predicted with what happened, and do a more thorough study every three years. The next full study is planned for 2030.

Young said the asset management plan gave the utility a list of every project with estimated costs by year. He said staff will update it regularly instead of revisiting the city’s assets only every few years. Councilman Kevin Manley said the city didn’t have a plan like that before.

On the comparison with other communities, Manley noted that some may have already raised rates and others haven’t, so the rankings will shift. He said that even after all three increases, Jasper would still rank below three communities on the chart.

Manley also asked whether smaller communities face a harder time paying for water systems. Young said water costs are mostly fixed, so adding customers helps spread them out. He said he doesn’t know what investments other communities have made, but that water funding falls short nationwide.

Young said utilities that delay investment face rising construction costs, and those that fall too far behind risk another supplier taking them over. Councilwoman Nancy Eckerle noted that some smaller communities in the area are already served by the Patoka Lake Regional Water and Sewer District.

“I think us maintaining it and doing our due diligence is the most financially responsible path forward for us in terms of our ratepayers in our community,” Young said.

Young invited council members to contact him with questions before November’s final vote.