(A) The municipal wastewater utility provides access to water treatment, distribution and disposal service to all properties within the corporate limits of the municipality. In some cases, the property owners have elected not to seek connection to the utility systems, and at this time, the municipality's policy is to permit these customers to remain disconnected, so long as there is no health or environmental violation.
(B) The policy of providing access to the water utility means that the city has the necessary interceptor and trunk lines available to distribute water to the developed property in the area, however, in some cases, the individual service laterals to serve an individual parcel of land might not be installed. There can be several reasons that the individual service lateral is not installed, including a lack of interest in service on the part of the larger neighborhood, a lack of sufficient developmental density necessary to make the service lateral economically feasible, or a simple satisfaction on the part of the property owner with the function of the current well on site.
(C) The policy of providing access to water utility service is completely commensurate with the construction of the northwest water and sewer interceptor project in 2001. In that project, Peru Utilities constructed major water and sewer interceptor facilities with the design capacity sufficient to serve the entire unincorporated area south of US24 and east of US31, and areas beyond. Now that the interceptor is installed, Peru Utilities will extend sewer and water service to any property owner or proposed development in the service area which has access to these facilities, at the expense of the property owner. Again, as stated above, there is no free lunch. While individual property owners may have difficulty with this concept, it is standard practice on a statewide basis for developers to pay for the cost of utility extensions to their developments.
(D) The municipal water utility provides potable water service to properties within the service area of the water utility, in many cases outside of the corporate limits of the municipality. This policy states that the water utility meets the parameters of providing water service to a property when a municipal water distribution line is located within 300 lineal feet of the nearest property line. The municipal water utility technically provides the service of pumping water from the water source, treating the water to some level, distributing the water into the system of municipal water lines, storing the water for peak demand and fire protection purposes, and maintenance of the production/distribution system, in its entirety. In some cases, property owners have not connected their property to the municipal water system and use private water sources (primarily shallow, private wells), instead. This decision was/is made by the property owner, generally in accordance with the development standards of the property at the time of the original development.
(E) The municipal water system extends beyond the corporate limits of the municipality and water service is provided to property in unincorporated areas. The water utility is administered by a Utility Service Board which is responsible for recommending user charges to the legislative body of the municipality for implementation. The legislative body of the municipality may consider changes to the user charge system to reflect special situations, as well as changes in policy with regard to the type of customer and/or the location (inside or outside of the corporate limits of the municipality).
(F) The policy of providing municipal water service to any property - either inside or outside the corporate limits of the municipality - is not to be construed as being "free" in any respect, and is certainly not covered by property taxes. The water utility is supported by a system of user charges which is administered by the Utility Board, in cooperation with the municipality. In addition, the current development policies and standards of the municipality require the developer to pay any capital costs associated with the extension of water distribution facilities into any proposed development. The only major capital expenditures covered by the water utility (outside of the service extensions afforded by the developers) is the capital cost of constructing and maintaining water pumping, treatment and storage facilities, which are paid either directly or indirectly through the utility's user charge system. The cost of extending distribution lines and of connecting to the water system is to be borne by the property owner/developer.
(G) Property tax revenues are not a part of the water utility budget. The water utility sets a system of user charges which are generally paid on a monthly basis. Those user charges cover both the capital and operating costs of the water utility. In addition to monthly service charges, the water utility may consider and/or establish a system of fees for other services such as various connection fees, and/or supplemental fees for special facilities installed to meet the needs/demands of various customers. The water utility is also subject to regulatory requirements which are administered at the state and/or federal level. As such, the system of fees and charges must be adjusted from time to time to remain current with regulatory and other requirements.
(H) With regard to annexation, there are several t issues related to the availability of water utility service. First, the only way in which residents of the unincorporated area can enjoy municipal water service is through the population and development densities afforded by the city. Therefore, it is the position of the city that there is no legitimate argument that citizens in the unincorporated area are somehow entitled to selectively choose which municipal services they want and which they do not want, especially since such selections are not afforded the citizens of Peru.
(I) Second, the water utility service is made available outside of the corporate limits, but that service is not "free." The capital and operating costs/fees are charged to every property owner connecting to the water system, through the utility's user charge systems.
(J) Finally, the city has the option to revise its utility system to reflect customers inside and outside the corporate limits of the municipality. These differential charges must be “fair and equitable” in accordance with applicable laws and regulations, but there is no systemic prohibition against charging customers outside the corporate limits higher rates than those inside the corporate limits for a number of valid reasons. The Utility Board and the city will determine when and if such adjustments are made to the revenue structure of the water utility.
(Ord. 24-2002, passed 8-5-02)