Sewer rate showdown: Funding options explored

Putting taxpayer dollars into industrial infrastructure is supposed to attract jobs and community growth that eventually pays us back. But when it comes to expanding sewer capacity at the Midwest and Northwest industrial parks, some residents are saying they don’t want to be a part of that plan.

Richmond Common Council members have listened to those concerns as they consider imposing higher sewer rates on residents to make the sites more appealing to companies that might locate there. 

And they’ve asked about alternatives, such as putting the cost on industrial users or extending the bond repayment to lower rates. Without a solution during its Sept. 2 meeting, council again tabled the ordinance that would raise Richmond Sanitary District customer rates 6% in 2026, 6% in 2027, 6% in 2028 and 3% in 2029. It would also raise the monthly storm sewer charge from $6 to $9.40.

“I think that this is something that we need to continue looking for ways where we can build out the infrastructure to build our community all the while making sure that our taxpayers are not being overstretched,” council member Justin Burkhardt said.

The $38 million sewer project became relevant when 326 acres were added to the Midwest Industrial Park in 2022. Project engineering has taken place to boost sewer capacity from 290,000 gallons per day to more than 2 million gallons per day in three phases. The current timeline would bid the project this year and begin construction during 2026.

Valerie Shaffer, president of the Economic Development Corp. of Wayne County, said that without sewer expansion the EDC would rethink what companies it could pursue for both industrial parks, eschewing high water — and thus high sewer — users.

“We are competing with other communities across the United States, and they expect sites to be shovel ready, that we have all infrastructure and utility capacities in place to support them, and so it certainly will limit our ability to compete,” Shaffer said.

At this time, there’s no potential occupant the EDC must stop pursuing if the sewer project is delayed or scrapped, Shaffer said, but a planned expansion by an existing company could not occur. 

Jeff Plasterer, president of the Wayne County commissioners, said the county has partnered with the city to make the Midwest Industrial Park an effective tool to attract employers to the county. He urged council to support the sewer project.

“To have a chance to fill the additional 300 acres that have recently come online in the park, we need additional capacity, which hopefully will drive additional revenue through tax increment financing that may be able to support the project,” Plasterer said. “And this project will create that capacity.”

Others did not share that view.

Theresa Whittaker, who lives on the west side, said sewer capacity would not help residents.

“I am protesting having rate hikes for something that does not ever, ever, ever going to benefit me,” she said.

Several residents from the neighborhood around South V Street and South 11th and 12th streets returned for the second time to share concerns about the absence of storm sewers and the flooding they experience in their homes.

Sean Andreas said residents face the prospect of new taxes and the city should focus on necessary maintenance and projects that provide more immediate benefits to residents.

“I would rather the projects that already need attention that will make a better quality of life for residents be the focus and not some hypothetical factory that would reap the benefits while taking away from the residents you serve,” said Andreas, who noted that the city’s poverty rate has risen even though companies have moved into the industrial park. Almost a quarter of Richmond’s residents live below the poverty line, at 23.2%, nearly double the Indiana poverty rate of 12.2%, according to 2023 census data.

Customers pay a monthly rate based on their water meter size, plus a treatment rate per 1,000 gallons of water used. In 2029, most residential customers would pay $35.02 for the standard five-eighths or three-quarters-inch water meters, plus $8.18 per 1,000 gallons of water. Commercial users would pay the same treatment rate plus the meter rate, which ranges from the $35.02 to $14,451.62 for 12-inch meters. 

Industrial customers would pay a meter rate, plus $7.29 per 1,000 gallons of water.

Pat Smoker, director of the sanitary district, said 70% of the sanitary district’s usage is by industrial and commercial customers, with only 30% usage by residential customers. When council asked, he thought the industrial rate could be changed without residential and commercial rates changing.

Smoker said that pursuing a 35-year bond rather than a 20-year bond would not greatly impact rates. The first two years of rate increases, he said, are bond coverage. If those are implemented, the rates could be reevaluated and take into consideration any new industry’s tax increment finance impacts.

Overall, the four years of increases would mean sewer rates increased seven consecutive years. Council member Gary Turner said previous rate increases also align with $105 million in projects, including a federally mandated, long-term project to reduce raw sewage discharge into the Whitewater River.

Turner said the body is trying to be responsive to concerns. “As we sat here two weeks ago, it almost sounded like we were raising rates over the years in the past arbitrarily, maybe even capriciously,” Turner said. “That was not the case.”