(A) (1) State law, found at I.C. 36-9-23-25(d)(9) and (d)(10) provides that a municipal utility may establish its sewer fees to be paid by its customers based upon a number of factors.
(2) Those factors include:
(a) A flat charge for each sewer connection;
(b) The amount of water used on the property;
(c) The number and size of water outlets on the property;
(d) The amount, strength or character of sewage discharged into the sewers;
(e) The size of sewer connections;
(f) Whether the property has been or will be required to pay separately for any part of the sewage works;
(g) Whether the property, although vacant or unimproved, is benefitted by a local or lateral sewer because of the availability of that sewer. However, the owner must have been notified, by recorded covenants and restrictions or deed restrictions in the chain of title of his or her property, that a fee or assessment for sewer availability may be charged, and the fee may reflect only the capital cost of the sewer and not the cost of operation and maintenance of the sewage works;
(h) The cost of collecting, treating and disposing of garbage in a sanitary manner, including equipment and wages;
(i) The amount of money sufficient to compensate the municipality for the property taxes that would be paid on the sewage works if the sewage works were privately owned (PILOT); and
(j) Any other factors the legislative body considers necessary.
(3) The town legislative body considers it necessary to include, among the factors listed above, pursuant to the authority in I.C. 36-9-23-25(c)(10), the factor of the rate of return on investment (ROI) as a component of the rates.
(B) The town considers it necessary to include, among the rate factors listed above, pursuant to the authority in I.C. 36-9-23-25(c)(9) and (10), the factors of the rate of return on investment (ROI) and payment in lieu of property taxes (PILOT) as a component of the rates to be collected from its sewer customers.
(C) The town will collect both the ROI and the PILOT from the Sewer Department and such money shall be placed in the Town General Fund for general fund uses.
(D) Those factors shall be calculated annually for inclusion in the budget for the next year and shall be reflected as miscellaneous revenue to the General Fund.
(E) The pro rata portion of such calculated payments, as included in the budget, shall be made by the Sewer Department to the General Fund on a monthly basis, subject only to any bond covenants regulating such payments.
(F) The formula for the calculation of PILOT and ROI shall be as established by generally accepted ratemaking accounting practice (GARAP) in effect at the time such calculation is made.
(G)
The rate of return shall be a reasonable rate of return calculated in accordance with the relevant procedures of GARAP not to exceed 7.5% per annum.
(Ord. 2012-23, passed 10-24-2012; Ord. 2020-11, passed 9-9-2020)