City of New Castle,Indiana

City Utilities

 
Who's Responsible for City Utilities: 
The Mayor is responsible for the policies, maintenance and operation of the water and water pollution control departments and all non-billing/collection services of the Utilities Office.
The Clerk-Treasurer is responsible for the policies and administration of the billing/collection services of the Utility Office.
Mark Stacy is Office Manager, responsible for the daily operation of the Utility Office.
Greg Phipps is Water Superintendent, in charge of daily operations and compliance.
Fred Duvall is WPC Superintendent, in charge of sewer collection system maintenance and repair.
Steve Swoveland is WPC Superintendent, in charge of wastewater treatment plant operations and compliance.
Justin McGuire is WPC Pretreatment Coordinator, in charge of industrial pretreatment activity.
 
 
FREQUENTLY ASKED QUESTIONS
 
 
 
Q. What is the difference between the general fund and the utilities fund?
A. The general fund is made up of revenues received by the city - primarily from real estate taxes, local income taxes or COIT (County Option Income Tax), taxes on cigarettes and gasoline, gaming revenues and fees for services rendered through the various departments of the city. New Castle has also benefited from the locally adopted food and beverage tax by receiving a grant from that commission for a capital project at Osborne Park.
The City of New Castle operates both water and sewer utilities. The utilities are not funded with tax revenues. They are businesses, and stand alone as do other businesses. Their funds are generated through user fees or from the sale of water or sewer related services. Revenues are raised by the imposition of a rate structure upon those who utilize the services or purchase the commodity. That rate structure is established by the passage of a rate ordinance by the City Council.
 
Q. How does government determine the amount of money needed for its operations?
A. It is the responsibility of the executive branch (Mayor) to prepare a budget for review and consideration by the legislative branch (the Council). Annually, the Council considers and adopts a budget. This establishes or appropriates the amount of money which may be spent in the administration of the City for the calendar year. It is the duty of the Mayor not to overspend the budget established by the Council. Likewise, it is the duty of the Council to provide proper funding for the City so that it may provide the services demanded by the citizenry. Once a budget is established (funds are appropriated), the Mayor cannot spend more than is appropriated, absent a find by the Common Council that there is a need for an additional appropriation.
 
Q. What state governmental agencies review these matters?
A. After the City Council passes the budget, it then goes before the Indiana Department of Local Government Finance (IDLGF) for review. That department determines if the budget passed should be approved or reduced in order to conform with State controls.
In the case of utilities, rate ordinances for the water department are reviewed by the Indiana Utility Regulatory Commission (IURC). Sewer rates are considered services and not a commodity and thus, those rates are not reviewed by a State agency.
 
Q. Why would the City need interim financing to get through the year?
A. Property tax revenues make up the largest portion of monies in the general fund. These funds are collected by the Henry County Treasurer who then issues the City their portion. Spring collection over the past few years has been delayed due to legislation on the State level and State legislation has limited the amount of revenue a city may "carry over" to the beginning of a new year. Both of these factors have made it necessary for cities to obtain interim financing until these revenues are received. The City administration cannot spend more money than is budgeted (appropriated) without approval of the City Council. Any funds obtained must be repaid prior to December 31st of the year they are obtained.
 
Q. How do large capital items like a road project or a new swimming pool get funded?
A. There are three (3) principal ways to fund major financial projects. As you know, there are grant sources available for some projects. The City of New Castle is pursuing grants for a wide range of projects. Unfortunately, grants almost always require a local match and very seldom provide sufficient revenues to complete the project. In such cases, the City must borrow sufficient funds to complete the project. This is done through long-term or bond indebtedness. A bond ordinance must be approved by the City Council. The bonds are then repaid by additional tax moneys or higher utility rates. If the bond is to be paid through the general fund by increasing the property tax levy, the project, after approval by the City Council, must also be approved by the Department of Local Government Finance. If that department determines the project to be needed and reasonable, the City may, through its ability to tax property, increase its property tax rates in accordance with its bond ordinance.
In the case of utilities, the money needed to repay the bonds is added into the utility rate. Once again, in the case of water rates, those must be approved by the Indiana Utility Regulatory Commission.
These major capital improvement projects funded by tax dollars should not be confused with the budget process. These stand alone and should be considered on their merits, if and when they arise.
 
Q. What is a utility rate study?
A. Because a utility is a business and should be run as such, it is important that their operations be reviewed by independent professional auditors or accountants. These accountants look at the operation of the utilities and determine if their rates are sufficient. These rate studies are required by the Indiana Utility Regulatory Commission when it considers proposed rates for the utilities.
(information provided in this section includes excerpts from a legal memorandum and fact sheet provided by David L. Copenhaver, City Attorney in 2005)