EAST CHICAGO | An estimated $1 million annual deficit in running the Sanitary District has officials considering the city's first sewer rate hike in 15 years.
A proposal approved Thursday by both sanitary and stormwater commissioners would raise water bills for the average residential users by $3.95 a month.
The new rate of $1.90 per gallon for the first 100,000 gallons used won't change East Chicago's ranking as second only to Hammond in having the lowest sewer charges among Indiana communities over 25,000 residents.
But the monthly 40 percent increase would partially be offset by a new semi-annual stormwater fee of $48 per home to be assessed on county property tax bills.
The previous billing system based solely on water usage is antiquated, said Eric Walsh of H.J. Umbaugh and Associates, the Indianapolis certified public accountant who has spent the better part of the past year examining the Sanitary District deficit problem.
Instead, a "cost of services" approach — in which the expense of large-volume users isn't spread out among all customers — is becoming common in the state, Walsh said.
"Billing charges don't change based on the user," Walsh said. "Large industrial users really drive the costs, which basically don't change despite flow rates."
The new system would be based on the size of the water meter. Most homes use a 5/8-inch meter and would be charged a base rate of $4.23 per month.
Large users with a 10- or 12-inch meter would be charged a base rate of $1,070 per month under the proposed billing charts.
The flow rate per gallon will actually go down, Walsh said, but fixed fees for billing and base meter charges, combined with the new stormwater fees, mean that customers who use the most, pay the most.
Bi-annual stormwater fees would be calculated from 16 classes under the system, with single-family residences paying the least, and large industrial properties assessed up to $3,840 per year.
Sanitary and stormwater processing cost East Chicago around $6.7 million per year, Walsh said, but the city collects only $5.7 million for the service, so the proposed changes would recover enough money to keep accounts balanced.
Though the effective date of the new rate scales approved on Thursday is Jan. 1, 2013, the measures still must be approved by the City Council.