Utility district to cap connection fees
The LaGrange County Regional Utility District will be asking its customers in the Fawn River Crossing service area to make up a shortage on their billing that was the result of an error in the billing software.
The district board discussed the problem at their special session Thursday evening and were told that the software issue resulted in an underbilling for the service area. Overall, the error meant that the district had underbilled a total of around $14,000.
The software company, Keystone, when contacted by the district, reportedly responded that it “wasn’t their fault,” the board was told.
“We are within our rights to recover the amount,” the district’s legal counsel, John Gastineau, told the board. “It should have been charged, but wasn’t. Our ordinance is clear on how the customers were to be charged.”
Gastineau told the board that they needed to decide how to go about recovering the underbilled amount. The 10 customers currently in the service area were underbilled from $225 to $1,907.
The board voted to give customers the option to either pay the amount at one time or to pay it over the course of 12 months.
The board later went into executive session to discuss the possibility of litigation against Keystone.
Connection fees cap
The board also debated the cost of rising connection fees in the various service areas.
Under the district’s ordinance, new construction of homes or businesses in a service area that connect to the system must pay a connection fee. This fee rises each year from when the system is installed. The highest connection fee is for the Fish/Royer service area, with new connections costing $7,025, on top of the cost of a grinder pump and installation. Region A is the lowest cost at $2,310 for a connection fee.
It was explained to the board that the idea has been the total sum of the capital cost of each district’s billing since the inception of each service area. Approximately half of each month’s bill is to pay for the capital costs of the system.
“It’s a huge hurdle for people wanting to build,” said Board Vice President Ron Kantorak.
Gastineau noted that there were two ways to look at the fee, as either offsetting capital costs or paying for capacity and growth in the system. He pointed out that if a subdivision was developed and hooked into the system, the developer would be required to pay for the expansion of the system. Likewise, as individuals add on to the system, they would be paying for a share of the capacity as well as helping with future costs of expansion.
“I see the merit in why they (connection fees) exist,” commented Board President Mike Sutter. “The problem is, they get so huge they curtail residential development.”
Kantorak noted that he would like to see the district replace the rising connections fees.
Board member Howard Slater commented that, in the overall cost of a new home, the connection fee is a relatively small part of the costs.
If the district were to cap the fees, Sutter suggested doing so in the future, so that those who have just paid a connection fee won’t feel as if they are owed a refund, as well as allow those thinking of building to pay ahead.
The board voted to begin capping a system’s connection fee at the 15-year level. Fish/Royer will be in service for 15 years in 2015. Other service areas will then also see their connection fees stop rising as each reaches 15 years, meaning the newest system, Shipshewana West, will see connection fees capped in 2027.