Residents will pay another $6 per month to cover mandated project
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Residents of the City of Kokomo have been hit with several new fees and taxes over the past few months, and another one is in the works. On Nov. 10, the Kokomo Common Council considered a new fee to cover the construction of a federally mandated wastewater control project.
The project is the penultimate improvement to the city’s sewer system required by the Environmental Protection Agency (EPA) and the Indiana Department of Environmental Management (IDEM).
City Director of Engineering Jon Pyke was on hand to explain the details of the project and the need for the fee as the council held a first reading of an ordinance authorizing up to $50 million in municipal bonds and an accompanying sewer rate increase.
Pyke explained that the city once maintained many combined sewage overflows (CSO). The storm sewer and sanitary sewers are connected, and when precipitation is particularly heavy, the overflows allow untreated sewage to empty into the Wildcat Creek.
In 2003, the Environmental Protection Agency issued the Clean Water Act, which required all municipalities to eliminate nearly all of their CSOs. The City of Kokomo complied with the law by submitting a long-term control plan to address the issue.
CSO elimination began following the long-term control plan’s approval in 2007. The city had until 2023 to complete all of the eliminations. However, as the city began construction on a peak excess flow treatment mechanism at the wastewater treatment plant, it uncovered contamination left behind by the Continental Steel Corp.
The city was allowed a two-year extension to complete the long-term control plan’s goals due to soil remediation needed, but the end of that extension is nearing. The city has until the end of the year to have the last of the projects underway.
The largest of these projects is the re-routing of a seven-foot diameter CSO running under Washington Street at Foster Park. Pyke explained that the project will involve installing an even larger sewer pipe from the CSO to the treatment plant, following the path of the Wildcat Creek.
“To give you an idea, our current north side interceptor is a 42-inch pipe, and one 84-inch pipe is running into that,” said Pyke. “So you can see how many times in a heavy rain that sewage overflow is kicking out into the creek.
“We have to eliminate the number of times that happens. That’s why we’re here. Across 20 years, the city spent roughly $27 million through 2019, making those progressive moves to eliminate those CSOs. In 2007, we had 53 or 54 of those.”
Pyke said that the law still allows some CSOs to function, as it is nearly impossible to operate a wastewater system without a few emergency outlets for extreme rain events. But the large CSO at Washington must be eliminated, and the cost is considerable.
“It’s going to cost between $24-$32 million,” said Pyke. “With the revenue that we have coming in, there’s just not enough do that. We have to borrow that money as a city, and that’s why we’re at this point.”
Failing to complete the long-term control plan is a costly misstep. Should the city not begin the construction process on this last CSO elimination by the end of 2025, it will face daily fines from the EPA amounting to $27,500 per day.
“If we feel like we can’t afford this project, then we certainly can’t afford the fines,” said Pyke.
Councilman Tom Miklik read the ordinance into the record, citing the city’s intent to issue municipal bonds not to exceed $50 million. That amount raised eyebrows, as the cost of the CSO elimination project is projected at just $24-$32 million. Councilman Bob Stephenson questioned the amount sought.
“What’s the discrepancy?” asked Stephenson. “We’re talking $24 million and then $50 million.”
Pyke returned to the microphone to explain that city must maintain a five-year capital improvement plan under the requirements of the Clean Water Act. Municipalities must commit to spending an amount of money on sewer system improvements, and the EPA determined that the City of Kokomo was not investing enough into the system.
To meet this requirement, Pyke chose to roll in several small construction projects that are not tied to the 2025 deadline, rather than return to the council repeatedly, asking for additional funding.
“This is to generate the revenue we need to make some upgrades at the plant that are in the five-year capital plan,” said Pyke. “There are a couple of lift stations that have to be redone and things like that. Those projects have yet to be built out. But in anticipation of those, rather than just keep coming back and getting rate increase after rate increase, I just grouped them together.
“That’s why the not to exceed $50 million doesn’t match the $32 million just for this one project.”
Pyke added that the $32 million includes an alternate method of installing the collection system that offers certain functional benefits. However, he prefers to pursue the less expensive $24 million route.
The remonstration that followed was less focused on the project and its necessity and more on the transparency of the matter. Former mayor Stephen Daily was the first to voice concerns about transparency, chiding the city administration for not disclosing the additional projects until specifically asked by Councilman Stephenson.
“We were led to believe $50 million is going to be for this one project,” said Daily. “Now, all of a sudden, there are several other projects built in there. I think the public deserves to see a list of those projects and what their estimated costs are, to have true transparency.
“I’d also like to know what the estimated cost is going to be to the property owners and users of the wastewater system in the City of Kokomo. What’s the cost going to be to a property owner, a homeowner? It seems to me that you ought to be able to give us that kind of information.”
The cost to the taxpayers is included in the ordinance, though it isn’t plainly spelled out. The rate increase is disclosed, but there isn’t a translation to dollars. Miklik provided the projected increase to homeowners.
He said the average household in Kokomo uses approximately 3,000 gallons of water each month, so they can expect their wastewater rate to increase by $6.54 per month. This comes on the heels of a sewer rate increase in 2024, along with a newly established trash collection fee and an increase in a local income tax rate to cover the construction of a new county jail.
Incensed by the repeated tax and fee increases, one remonstrator, Rick Emry, took a different approach; one that was met with surprise by most in attendance. He suggested that perhaps the city could simply not do the project at all and hope that the wrath of state and federal regulators would not follow.
“Our president just gutted the EPA, so yeah, maybe they will find us, but do they have the manpower to collect it and look over our shoulders?” Emry asked. “Who is actually looking over our shoulders to make sure that we’re in compliance? I mean, we’ve had 22 years to fix the problem, and granted, it was a big problem that needed to be fixed, and I’m not saying we shouldn’t fix it. And I don’t want to pay a $27,000 fine, mind you.
“But is the EPA really going to be looking after us and going after us with the federal government gutting that program and other programs that states and local governments were relying on for compliance?”
Pyke quickly dismissed the suggestion.
“There is somebody looking over our shoulders,” said Pyke. “This will not go unnoticed. We’re in direct contact with IDEM (the Indiana Department of Environmental Management). They’re watching this due to the contamination that may or may not have been left by EPA themselves that we had to take care of.
“There is communication. There is oversight from IDEM. This will not go unnoticed if we do not get this under contract.”
Councilman Matt Grecu attempted to explain that the city did explore other options before resorting to a fee increase.
“We have looked at the utility from a lot of different angles, up to and including looking at the possibility of selling it to another entity to see if that was a more economical way to operate,” said Grecu. “All those ideas came back to the most economical way for us to continue to serve the citizens was to continue to operate the utility.
“We did some rate studies. We looked at neighboring communities and what their rates were. Even with this rate increase -- that none of us like to have to do – we’re at a much lower cost than many of our neighboring communities.”
The council approved the bond issue on first reading, and it will hold a public hearing on the matter at its next meeting, Mon., Nov. 24, at 6 p.m. The body next considered a proposed fee increase on wastewater collection services.