City electric users will get a little break when increases start next month as the City Council voted to change the way it calculates rates.

The ordinance, introduced earlier in the month, would change the formula by which rates are calculated to benefit residences and charge more to large users of electricity.

Although a rate increase was voted on in May, a mistake was found by Utility Department employees and a proposed June enrollment of the new rates was put on hold until October.

“The intent of the council resolution was to correct what the council originally intended months ago when they passed the rate increase,” John Sievers with accountants Umbaugh and Associates said. “What this (ordinance) does is correct this.”

What was at issue was a tracking factor, or the difference customers pay for wholesale electricity from the Indiana Municipal Power Agency. The first rate increase had only one tracking factor for energy, but an oversight by Umbaugh left out another part of the tracker, demand.

“For 97, 98 percent of these customers, it will result in a slightly smaller rate increase,” Sievers said.

Sievers said the new ordinance and a hearing was a “necessary do-over” and will not affect the city’s bottom line. In 2008, the city had lost $250,000 because of rates that had not been changed in 20 years.

“It does not effectively change the total revenue or budget, only the manner that it will be collected,” Sievers said.

Mayor Larry Haag said he met with the large users of city electricity, like Perdue, explaining the rate increase and tracking changes. He said they understood the need.

Council members passed the ordinance unanimously.

“It’s nice to know that residential rates are lower than what we thought,” Councilman Steve Dyer said.

“Not that much,” Councilman Tom Baumert responded. “When they get that bill, they are not going to be too happy anyhow.”

The council then passed another ordinance that will help protect consumers by banning the sale of demand electricity by large users and selling it on the open market.

The ordinance, asked for by IMPA, would stop the sale of demand by brokers only if the city allows it. Electric Line Superintendent Randy Emmons said none of the city’s users have ever been contacted.

The council unanimously passed the ordinance after the usual ordinance rules were suspended.

In other utility news, the council heard an overview by Utility Office Manager Anita Ash about collections by the utility office.

Last year, Ash said, the city canceled a contract with collection agents Helvey and Associates and assigned a person to deal just in collections.

Since then, Ash said, the city has collected $53,954 in overdue electric fees from Helvey accounts. In total, the city has collected $105,979 from overdue payers.

“As we become better acquainted with our software, we are finding ways to become more efficient with our collections,” Ash said.

In other business:

STIMULUS FUNDS

Haag announced that the city will receive $52,000 from stimulus money for a new city bus and communication equipment. The bus it will be replacing has about 163,000 miles on it, Street Commissioner Ernie Evans said.

The transit department is also waiting to hear if $48,000 in extra stimulus dollars will be approved. Those funds will be used for improvements at the transit garage.

FALL EVENTS

The Board of Public Works and Safety approved three short-term street department closings for fall events. The first will allow the American Legion to use the city parking lot on E. Main Street for a Motorcycle Cruz-in from 2 p.m. to 6 p.m. Saturday at the legion hall.

The First Baptist Church asked the board to close N.E. First Street from Walnut to Hefron streets for its annual Harvest Fest from 4 p.m. to 8 p.m. Oct. 25. Jim Wampler with the church said 500 attended the festival in 2008.

The final request approved was the use of the city’s parking lot on E. VanTrees Street, where the old Senior and Family Services building stood, for Haunted High from Oct. 9 through 31.

Councilman Allen Brown said this year’s edition of Haunted High, an annual fundraiser for the Catholic Community of Washington, will be held at the old Odd Fellows Lodge at 607 E. Main St. every Friday and Saturday in October from 7 p.m. to 11 p.m.

Parking for the event will be in the city lot and workers from the event will be crossing guards for visitors.

SEWER CLARIFIER

The council opened bids on a new clarifier for the wastewater treatment plant. Three returned bids from $134,134 up to $146,460. The bids were referred to Wastewater Superintendent Scott Rainey for review.