A group of Center Grove area residents got upset about whether their water bills were fair, convinced a state lawmaker to change the law and brought a regulatory agency the first-ever case on whether people who live out of town should be charged more for water.
The Indiana Utility Regulatory Commission listened to the residents and also Bargersville Utilities and then dismissed the case by taking no action for 120 days.
No decision was made on a challenge that White River Citizens United and more than 100 homeowners brought against Bargersville for how it billed customers for a 77 percent rate increase in 2010, utility regulatory commission spokeswoman Danielle McGrath said. The result is that Bargersville isn’t required to make any changes to its rates, she said.
“Not making a decision is essentially a decision,” McGrath said.
Bargersville had argued for the case to be dismissed because new town council members had been elected after the rate increase, and they planned to make the main changes that the group wanted, Bargersville Utilities superintendent Kevin Killinger said. Namely, the new council members want to lower fees, start charging all residents the fees on their monthly bills instead of through their property taxes if they live in town, and do a rate study about how much to charge.
The town asked the state agency for a dismissal because it couldn’t make all the requested changes immediately, Killinger said. For instance, the town needed time to add hydrant fees onto about 3,000 town residents’ monthly water bills. It also wanted to wait until the end of the year to do a rate study, since it just opened a new water treatment plant and needs to know exactly how much it will cost to operate, he said.
Bargersville spent about $150,000 in water utility fee money on legal and accounting fees to make its case for a dismissal, Killinger said.
The dismissal will allow the town to lower fire hydrant fees from $20 to $13.50 a month starting this month and to charge all 10,000 customers the fire protection fees on their monthly bills this spring, Killinger said.
The decision, or lack thereof, also could lead to a change in state law. State Rep. David Frizzell, R-Indianapolis, has proposed legislation that would require the state agency to issue a ruling with a written explanation, instead of just being able to dismiss a case by not taking any action in 120 days.
Frizzell had sponsored the original bill that became law and lets residents challenge town-run utilities that charge at least 15 percent more to residents who live outside town limits.
The result of the Bargersville Utilities case led him to propose another bill that would mandate that the agency publish a decision either for or against a challenge, in order to give the public more clarification about why the ruling was reached, Frizzell said. The Indiana House of Representatives passed the legislation unanimously, and it will next move on to the state Senate.
Under the current law, the state agency has three options when residents challenge utility rates that are at least 15 percent higher for residents who don’t live in town and pay town property taxes, McGrath said. The Indiana Utility Regulatory Commission can do nothing, rule that the utility can keep its rates for out-of-town customers the same or rule that rates must be lowered for out-of-town customers, McGrath said.
The agency can’t do anything about rates for people who live in town in such cases, because the issue is whether customers who live out of town are being charged unfairly, she said.
In this case, the agency did not find enough evidence to suggest that Bargersville’s rates should be changed, McGrath said.
White River Citizens United, a community advocacy group, had challenged how Bargersville was charging south Center Grove residents for fire hydrant fees, which go toward what it costs the utility to maintain enough pressure to keep the hydrants working.
Bargersville residents have been paying for the fire protection fee with their property tax dollars, while people who live outside town pay a monthly fee that’s added to their water bills. White River Citizens United argued that about 20 percent of town residents paid so little in property taxes that they paid less for the fee than Center Grove area residents.
White River Citizens officials could not be reached for comment, but the group posted a statement on its website saying that it doesn’t plan to take any further action.
The community group was the first under the new state law to pursue a challenge against higher utility fees for customers who don’t live in town, McGrath said. No other similar challenges have been filed to date.
BREAKING IT DOWN
The Indiana Utility Regulatory Commission took no action on a case that White River Township homeowners brought against Bargersville Utilities for how it charges for fire protection fees.
Who: Community advocacy group White River Citizens United and 115 White River Township property owners filed a challenge against Bargersville’s fire hydrant fees.
Why: Bargersville charged the same $20 rate to all 10,000 customers but used property tax dollars to pay the fee for residents who live in town, while Center Grove area residents who don’t live in town were billed with their monthly sewer bills.
The issue: Homeowners argued this was unfair, since some town residents paid so little in property taxes that they paid less for the fees.
Background: The case is the first of its kind in Indiana and was only made possible by a recent change to state law.
Bargersville’s position: The town wanted to make the changes that White River Citizens United wanted, such as by lowering the fee and charging everyone the same way on their monthly bills, but asked for the case to be dismissed so it could have more time.
What happened: The Indiana Utility Regulatory Commission took no action for 120 days, effectively dismissing the case.
Proposed change: A state lawmaker wants to change the law to require the state agency to publish a ruling either for or against such challenges, so the public gets an explanation about why a decision was reached.