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Letter To The Editor - Sewer Project


Robert Fiedler

A landowner on



To the Editor:

    I read with great interest the letter of John Gastineau that was printed in the May 14 paper. As often tends to be the case when a question makes its way to LCRUD, what is put forth as an explanation is once again more of a non-answer and, ironically in this instance, a starting point for more questions. While a great deal of words were written to justify LCRUD’s billing Shipshewana West users for “something,” tellingly there was no acknowledging that the real answer needed was how do they specifically justify a “wastewater charge” to us for a period in which no wastewater service was provided. I would think that billing statements providing a clear and accurate description of all charges should be a high priority for LCRUD, but it seems I thought wrong. Anyway, now that someone connected to LCRUD has at least made some attempt to justify their billing in a public statement, let’s take a look at some numbers.

If this billing is supposed to be “an amount sufficient to cover the interest charges that will accrue on the loan for the project as well as the administrative costs that will occur while the project is under construction,” then as Ricky Ricardo would say to Lucy….”You’ve got some ‘splaining to do.”

Per USDA, which is the source of funding for the project, the total of advances drawn against the loan package through today is $76,118.58. That’s how much is currently owed. With an interest rate of 3.75 percent, it would cost LCRUD $237.87 for a month as interest on this balance, using a 30/360 basis just to keep things simple. Per the information handed out in the December 2011 rate hearing, there were 251 equivalent users. Bill each at $34 a month as LCRUD has apparently done and you raise $8,534. That’s $8,296.13 greater than it currently costs LCRUD to service the current interest on the loan and is almost 35 times the loan interest amount. That would mean some awfully expensive administrative costs must exist to justify the extra $8,296.13!!

Even if the entire loan of $1,705,000 had been borrowed, the monthly interest cost would still only be $5,328.13. At that worst case scenario there would still be $3,205.87 left over for “administrative costs.” I’m not aware that LCRUD has hired more people, or acquired more facilities or equipment to handle the Shipshewana project, so how is the extra current $8,296.13 justified and can we be guaranteed that it will be used solely for the benefit of Shipshewana users?

I ask this because as I’ve mentioned in earlier letters to the editor, it seems very apparent to me that money paid faithfully by LCRUD users in other regions must have been the source of funds for the huge sums spent on the Shipshewana West project prior to the USDA loan advances of this year.

I wonder what will happen to the excess funds that this new billing would produce. Mr. Gastineau may want to reconsider his closing question.