The Washington City Council started the first step to raising the city’s electric rates, again.

Tuesday, the council heard a first readings of two ordinances that would raise electric rates 8.15 percent and residents outside the city will be an additional 5 percent on top of that.

The ordinances were in line with a second rate study performed last month by H.J. Umbaugh and Associates. According to the study, an average family of four, using 1,000 kilowatts an hour, will pay $92.82 a month for electricity.

A family is currently paying $85.83 a month, but the hike is less than a proposed 11 percent hike voted down by the council in March.

The reason for the defeat in the first rate hike was a program for automated readers, a cost of $1.1 million over several years. Tuesday’s rate ordinance did not have the automated readers.

“Whenever we started this last year we are looking at $4.20 per gallon (in gas),” Mayor Larry Haag said. “Things have changed and the economy has changed and the council felt the (automated readers) were not needed.”

When the readers were taken out, the total savings resulted in about $212,800 a year.

After the meeting, Haag said the city has done everything it can to keep costs low in its capital improvements plan, about $2.6 million over five years.

“We trimmed everything else as much as we could trim,” Haag said.

The rate hike, the first one in 20 years, was needed, according to the council. John Sievers with Umbaugh was back before the council again to say the city utility would be in serious trouble without the hikes.

“Over the last two years, the electric utility has lost $250,000,” Sievers said. “Some point you will run out of money and it will bleed until (the utility) corrects itself.”

Haag said after the meeting, the city is doing the hike just to break even and not to gain a profit.

“We have to stay in business,” Haag said. “That’s all we need right now, to get us through.”

The second ordinance the council read Tuesday was a rate adjustment for utility payers outside the city limits, namely Montgomery. The ordinance calls for a 5 percent increase put on utility bills due to added costs of line and service to those outlying areas.

Haag said that although residents in other areas may not have a vote on the council that will ultimately decide their rates, they are welcome to speak to the council.

“The last time we had a public hearing, no one showed from outside the city limits but they will have that opportunity,” Haag said. “I truly believe they understand the cost benefit they are still realizing here being on Washington Municipal Electric versus being on REMC.”

Both ordinances will have a public hearing and a final vote at the council’s June 8 meeting.

In other business:

BLOCK GRANT

Before the council meeting, a hearing was held for a community development block grant. The council is applying with the Southern Indiana Development Commission for $1 million in stormwater improvements in five areas on the north and west side of the city. There is no local match for this grant if the city wins it.

“These areas will help us tremendously for controlling water in the combined sewer overflow project,” Haag said.

The city has received two statements of qualifications from engineering firms for the project. A review committee has been formed, consisting of Haag, City Engineer Ed Barnett and Public Works member John Gray, to review the qualifications.

ZONING CHANGE

The council heard a first reading of a zoning change ordinance for a new subdivision between Bussard Road and SR 257. About 13 acres is zoned suburban and developer Jason Knepp asked for the change of zoning to residential. The Plan Commission has already approved the plan and the ordinance goes before a full vote at the council’s June 8 meeting.

STREET CLOSING

A section of N.E. First Street from Walnut to VanTrees streets will be closed on May 29 from 6 p.m. to 9 p.m. for a vacation Bible school block party. Chuck Ward with Christ United Methodist Church said all five Methodist churches will be hosting the school together and the block party will serve as registration. The council and the Board of Public Works and Safety unanimously approved the closing.

UTILITY WRITE-OFFS

The board voted to let the utility office write off about $2,500 of debt. The debt was from miscellaneous bills from 2004 and 2005. Utility Office Manager Anita Ash said her office has received about 75 percent of old outstanding debt found last summer.

MEREDITH UPDATE

Haag told council members that sidewalk replacement on the site of the old Meredith Hotel will begin next week. He also said the Chamber of Commerce is working on plans to put a greenway, complete with a gazebo and a fountain, at the site.

Currently, the county owns the property through a tax sale. City Attorney Jeff Norris said when the county completes title work, the commissioners plan to give the property to the city.

In other Main Street news, the city utility office has ordered more lights for the downtown area, paid for by Chamber fundraising efforts.