ORDINANCE NO. 1150

[This Ordinance has been proposed and is waiting for final approval].

AN ORDINANCE ESTABLISHING RATES AND CHARGES

FOR THE USE AND SERVICES RENDERED BY

THE WATERWORKS SYSTEM OF THE CITY OF SALEM, INDIANA

WHEREAS, the City of Salem, Indiana (the “City”) owns, operates and maintains a municipal waterworks pursuant to IC 8-1.5; and

WHEREAS, the Common Council of the City of Salem, Indiana has previously adopted Ordinance No. 644 on April 3, 1989 wherein a schedule of rates and charges for the use of and services rendered by the waterworks system of the City of Salem was approved; and

WHEREAS, the City has engaged London Witte Group L.L.C., as Financial Advisor (the “Financial Advisor”) to review and analyze the current rates of the waterworks; and

WHEREAS, the Financial Advisor has recommended that the current rates and charges of the waterworks are insufficient to meet existing rate covenants and the revenues required to operate and maintain the waterworks; and

WHEREAS, the Common Council has determined it is lawfully required, and is required by the covenants contained with the existing City ordinances to maintain rates and charges at a level sufficient to provide for the operation and maintenance of the waterworks and pay the costs of debt service of the waterworks; and

WHEREAS, the Common Council finds that the schedule of rates and charges as recommended by the Financial Advisor are non-discriminatory, reasonable and just; and

WHEREAS, the Board of Works has requested that this Common Council adopt such rates and charges; and

WHEREAS, the Common Council has therefore determined it is necessary to revise the rates and charges of the waterworks to provide additional revenues to operate the utility; and

WHEREAS, the Common Council finds that a financial emergency exists in the Municipal Water Works and that an emergency increase in rates and charges should be requested pursuant to I.C., 8-1-2-113.

NOW, THEREFORE, BE IT ORDAINED BY THE COMMON COUNCIL OF THE CITY OF SALEM, INDIANA:

Section 1:  That the new schedule of rates and charges for the use of and services rendered by the waterworks system of the City of Salem, Indiana as recommended by the Financial Advisor and approved by the Board of Public Works and Safety, is hereby approved, and that there shall be and there are hereby established for the use of and services rendered by the waterworks system of the City of Salem, Indiana, the following rates and charges based on the use of water supplied by said waterworks system:

Minimum monthly charge:

Each user shall pay a minimum charge in accordance with the following applicable size of meter installed for which the user will be entitled to the quantity of water set out in the above schedule of rates.

Hydrant Rental:

The amount to be paid by the City for fire hydrant rental shall be $280.37 per hydrant per year semi-annually.

The amount to be paid for fire hydrant service by users having private fire hydrants shall be $280.37 per hydrant payable semi-annually.

Connection Charge

Connection charges shall be $350.00 for a 5/8” or 3/4” tap and the actual cost for all taps in excess of 3/4”.

Water Wholesale Charges

The City of Salem, Indiana sells water to two other utilities the Town of Pekin, Indiana and the East Washington Rural Water Corporation.  The charges for sale of water to these utilities shall be at the rate of $2.16 per 1,000 gallons ($1.62 per 100 cubic feet) metered at the points of interconnection between said utilities.

Temporary Users

Water furnished to temporary users such as contractors, etc., shall be charged on the basis of the above consumption rates as estimated by the Waterworks Superintendent.

Automatic Sprinkler Systems

Water furnished for use by automatic sprinkler systems shall be charged for on the basis of the size of connection needed to adequately supply such sprinkler system, as follows:

All bills shall be due and payable monthly and bills unpaid more than seventeen (17) days following the date of billing shall include a collection charge of ten percent (10%) of the first $3.00 and three percent (3%) of the amount in excess of $3.00.

Section 2:  All ordinances or parts of ordinances in conflict herewith are hereby repealed; provided, however, that the existing schedule of rates and charges fixed by the prior ordinance shall remain in effect until the rates and charges in this Ordinance are approved by the Utility Regulatory Commission of Indiana, and until such time as the order of said Commission approving said new rates and charges shall direct.

Section 3:  This ordinance shall be in full force and effect from and after its passage; provided, however, that the schedule of rate and charges herein set out shall not become effective unless approved by the Utility Regulatory Commission of Indiana and until such time as said Commission shall direct.

Section 4:  A petition requesting an immediate emergency increase in rates and charges pursuant to I.C., 8-1-2-113 shall be filed with the Indiana Utility Regulatory Commission which will request emergency rates on an interim basis subject to refund pending approval by the Utility Regulatory Commission of Indiana of the permanent rates set out in this ordinance.

Passed and adopted by the Common Council of the City of Salem, Indiana on this 29th day of June, 2004.

                                                                                    COMMON COUNCIL

                                                                                    CITY OF SALEM, INDIANA

                                                                                    Ginger B. Morris, President

ATTEST:

Patricia E. Persinger, Clerk-Treasurer

Presented by me to the Mayor of the City of Salem, Indiana this 29th day of June, 2004.

                                                                                    Patricia E. Persinger, Clerk-Treasurer

Signed and approved by me as the Mayor of the City of Salem, Indiana this 29th day of June, 2004.

                                                                                    ____________________________________

   Judy K. Chastain, Mayor

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