Franklin residents will see an extra charge on their water bills starting early next year.
The Franklin City Council approved passing a fire hydrant fee onto residents as a way to cut spending from the city’s 2013 budget. The fee will show up as a new estimated $4.69 charge on residents’ monthly bills from the Indiana American Water Co.
Businesses or larger utility customers will pay more.
The charge will be higher than what residents in other cities pay because the water company has to take in the same amount of money it did when the city paid the fee, said Greg Roach, manager of rates and regulations for the water company.
The money collected from the fee goes to the Indiana American Water Co. to pay for fire hydrant maintenance, water main installation and general maintenance.
Council member Steve Hougland voted against passing the fee to residents.
Hougland said he did not want residents to pay it because they are already paying the fee with property taxes, and the city will not offer any tax relief to make up for it.
Residents will be paying an additional $56 a year.
“So it amounts to a tax increase,” Hougland said.
The city had been paying the cost, which has more than doubled in the past 10 years, council member Joe Abban said.
Next year, the city would have paid about $560,000 of tax money collected from residents and businesses, according to the clerk-treasurer’s office.
Mayor Joe McGuinness said Franklin faced a shortfall in next year’s budget and needed to pass the fee so they didn’t have to cut other services, such as police officers and equipment.
“What the amount cut does for the city will outweigh the fee,” McGuinness said.
The city will continue to collect the property taxes that previously had gone to paying the fee.
To pass the fee onto residents, the Indiana American Water Co. has to get approval to do so from the Indiana Utility Regulatory Commission, which could take a few months, McGuinness said.
The city hopes the approval process will be finished early next year and residents will start paying the fee by March, McGuinness said.
The water company needs to collect the same amount from utility customers as it would have if the city was paying the bill, Roach said. Greenwood and New Whiteland are two examples of other communities that also pass the fee on to utility customers in their monthly water bills rather than paying the bill with tax dollars. Residents in Greenwood and New Whiteland pay $4.12 a month for the fee.
An Indiana Utility Regulatory Commission regulation requires the water company to take in the same amount of money for the fee from residents as it did from the city, Roach said.
The city pays about $560,000 a year for the fee, while the residents who buy water from the company would pay about $380,000 a year at the $4.12 rate, water company spokesman Joe Loughmiller said.
The exact amount residents will pay for the fee will not be determined until next year after the Indiana Utility Regulatory Commission approves the fee amount, but Roach said the water company has estimated that it will be about $4.69.
The fee will increase residents’ water bills starting early next year.
Franklin residents saw a decrease in their bills when the water company adjusted its rates earlier this year, but the average user’s bill will be higher with the fee even after the rates went down.
Residents who used 4,800 gallons of water a month paid $35.23 before the rate change. After the rate change, those residents paid $33.57 a month.
The addition of the fire protection fee will raise the bill to $38.26 a month.