By ROBIN VARGO Leader Correspondent
KNOX — John Julien from H. J. Umbaugh and Associates, Plymouth, appeared before the City Council last week to request a bond ordinance. The request was made to re-work the bond because of the impact the Wastewater Treatment Facility project will have on sewer rates. Julien also requested that the council pass the bond issue right away by suspending the rules and holding the first, second and third readings in order to get the re-funding underway.
Julien presented a detailed list of the sewer plant’s expenses including the repayment of a bond issued in 1991. There hasn’t been any new debt, but the city is slowly paying off the debt from that bond. The city still owes $1.6 million on that bond.

“The sewage works is a business,” said Julien. “It has to run as a business; otherwise some areas are going to get out of sorts.”
Julien informed the council that one of the principles of good business is to have enough cash in the bank to adequately meet the business’s requirements (operating costs, salary payment, etc.).
“(The amount of money the city) has in the bank is a nice nest egg,” said Julien. “You are actually $75,000 higher than the minimum reserve requirement. I feel good that your cash position is strong as you approach this project”
The repayment of the bond issued in 1991 has an interest rate of 5 percent with semi-annual payments. The principle payment is made once a year. Julien recommended that the council re-fund or re-work this bond and roll this debt into the new bond issue. This would get rid of the uneven principle payments.
“This will put you in a little better position,” said Julien.
The city also needs a new vactor truck. This will cost $300,000. Julien recommended that the council add the purchase cost into this bond as well as the old bond, and estimated cost of the project. Working the purchase of the vactor truck into the bond is more of an asset than an outright purchase.
“Instead of leasing it (vactor truck), it will be less of an impact on the rates if you build it into the bond,” said Julien.
“The vactor truck is something that would be a real burden (to pay for) if we couldn’t build it into this (the bond),” said Councilman Greg Matt.
The estimated cost of the sewer project is $1,288,000. The Indiana Office of Rural and Community Affairs (OCRA) awarded the city a grant of $600,000 to help with the cost of the sewer project. The city’s cost is estimated at $688,000. With the re-funding of the $1.6 million bond, the estimated cost of the project and the financing of a new vactor truck, the city will need to borrow about $2.45 million. This will raise sewer rates up to just under $29.
Compared to surrounding communities, Knox’s sewer rates are still quite low even with this new bond. Plymouth’s rates are about $17, Culver’s rates are $38, Monterey’s are about $42, and Winamac’s are just over $44.