By SARA CLIFFORD and SUZANNAH COUCH, The Democrat
When money’s not coming in, sometimes, you have to make choices: Which bills are essential now, and which can I sit on for a little while?
Brown County’s two water utilities are seeing the effects of those choices.
Since March 13, essential utilities, which include water, wastewater, telecommunications, broadband, gas and electricity, have been prohibited from discontinuing service to any customer in the state, per Gov. Eric Holcomb’s executive orders related to the pandemic. That no-disconnect order has not been lifted yet.
Both Brown County Water Utility and Nashville Utilities also stopped applying late fees to customers’ bills in March, and continue to waive them.
However, they have to keep providing service, and that costs money.
Right now, there are no COVID-related federal programs to help utilities stay afloat if their customers can’t pay, said Dax Norton, the strategic direction adviser for Nashville. He also advises three other Indiana communities through MS Consulting.
“I’ve heard this question six, seven, eight times,” he said.
“I can tell you, that’s probably the biggest question and biggest concern for most utilities the size of Nashville.”
While some governmental units are focusing on how their budgets will have to change next year based on what money is coming in, utilities don’t have the luxury of time. “The utility side needs to be immediate,” he said.
Brown County Water Utility — which is privately owned by members — and the town’s water utility — which is owned and operated by the town of Nashville — are also customers of other water providers. BCWU does not produce all its own water, and Nashville Utilities doesn’t produce any.
For example, Nashville is in a contract to buy at least a certain amount of water from Brown County Water Utility, which the town then resells to its customers. “They expect to be paid for it regardless of whether or rate payers pay for it,” Norton explained.
Brown County Water
As of April 28, 101 customers of Brown County Water Utility would have been disconnected under normal circumstances, which totals around $17,000 the utility has not collected.
“We are willing to set up payment plans for people now or later, to assist them in recovering over time,” said Ellen Masteller, Brown County Water Utility’s office and administration manager
“I would encourage our customers to pay something toward their water service bill rather than waiting, if they can.”
Because the utility is regulated, it can only charge and collect the rates and fees approved by the Indiana Utility Regulatory Commission. If something goes unpaid, the utility and its members would not be able to collect it.
“We would eat the cost associated with providing water service without payment,” Masteller said.
Once the governor’s executive order is lifted, Masteller said she would seek guidance from the board of directors about a grace period for customers to establish payment plans before getting “back to business as usual.”
“I believe we will be OK, but there may be a recovery period for the utility as well as our customers,” Masteller said.
The utility also has been faced with extra expenses from buying personal protection equipment, like masks and hand sanitizer, for 13 employees.
“I have found it very difficult to access the needed supplies due to the fact we are not a health or medical facility. We have had to be resourceful,” Masteller said.
She added that local and national water associations have been helping them to secure PPE for employees.
“I’m very thankful some of our local businesses have been making hand sanitizer. We have 13 employees and it has not been easy to find enough to go around,” Masteller said.
The utility does have financial reserves, but they are restricted and require authorization to access them from the IURC or the United States Department of Agriculture Rural Development.
Masteller said Brown County Water is also considering applying for the federal Payroll Protection Program.
“The banking industry is overwhelmed with application. The money may run out before we can get an application to go through,” she said.
Staff at the water company have been working in split shifts and rotating staff to avoid having to self-isolate full-time. Office hours have been reduced and the lobby and drive-up window have been closed to the public.
“We are trying to stay focused on high priority work related items,” Masteller said.
“It is making things more difficult to operate, but worth it to keep our employees safe and healthy and continue to provide critical essential services to our customers.”
Nashville Utilities
The town of Nashville provides two essential utilities: water and wastewater. It operates a wastewater treatment plant and maintains water transmission lines throughout town and out of town, even as far as Bean Blossom.
The water utility is the one Norton is more concerned about.
The numbers look good at first glance. Revenue is up $16,495 over the same time last year, even though some major water users like schools and hotels were closed. A lot of that gain was from hook-on fees over the past four months, which is also good, because that means new customers, Norton said.
However, as of May 8, the town was counting a total of $44,504.22 in past-due water bills, from 52 customers. Most of that, though was from two customers, Norton said; one past-due bill alone is over $17,000.
At the April 16 town council meeting, Nashville Clerk-Treasurer Brenda Young said that more than 400 customers had been on an automatic bill-pay system with the town, but at least a third of them had canceled.
They won’t know how many more are past due until May 21.
“It’s not a dire situation right now,” Norton said last week. The town is getting barely enough revenue to cover the fixed costs of service.
Early this year, the water utility went “briefly on the red side” when it had to pay some legal fees related to a years-long court case with Brown County Water Utility. At that time, the town council authorized a loan of up to $100,000 from the wastewater utility to the water utility. To date, only about $20,000 has actually been loaned, he said.
If not for that loan, though, right now, things would still be in the red, Norton said.
“It’s close. It’s close enough that the town needs to be concerned about people not having the ability to pay for the product that they’ve used — by no fault of their own, of course. … If it were to continue, you’d probably have to continue to allow the wastewater side to stabilize the water side.”
The town will work with customers to get their past-due bills paid so they aren’t facing shutoff. The town does promissory notes, allowing the current amount due to be paid first, with a plan and promise to pay the past-due amount back over time with no interest.
The town is considering opening up the food and beverage tax fund to try to help customers pay their utility bills, but doing that would require state legislative approval, Norton said. That’s not likely to happen quickly.
Each county’s approval to have a food and beverage tax and what it’s allowed to use it for is individual, so while another county or town could allow this other use in an emergency, Nashville’s isn’t written that way, he said. Nashville’s food and beverage tax money is to be spent on sidewalks, parking lots, restrooms and streetscapes.
If the town could help businesses pay essential bills like utilities, rent and mortgage with that money, that could stave off bigger problems down the road, like empty buildings, depressed property value and lower property tax revenue, he said.
Before restaurants, which collect the food and beverage tax from patrons, were limited to curbside and carry-out for the past few weeks, food and beverage revenue was looking up. That fund had about a $200,000 reserve in mid-April, Norton said.
“So, yes, that is still potentially on the table,” he said.
