Peeling Back the City's Water Rate Proposal

The City of Bloomington has officially approved a significant water-rate increase that affects every customer class—residential, commercial/industrial, institutional (including Indiana University), wholesale utilities, and irrigation users. The Bloomington Common Council passed the ordinance on September 30, and will now proceed to the Indiana Utility Regulatory Commission (IURC) for final review and approval.

This update summarizes the impacts on businesses, the justification provided by the City, and considerations for Chamber members—including Cook Medical and Indiana University, both of whom have expressed opposition or concern.

What Passed on 9/30
According to the B Square Bulletin report, the City Council voted on Sept. 30 to approve the drinking-water rate increase, sending the measure to the IURC for final action. This aligns with the structure shown in Ordinance 2025-35 and supporting documents in your packet.
Key Approved Rate Changes (per Ordinance 2025-35)

• Residential: $5.31 per 1,000 gallons
• Commercial/Industrial: $5.83 per 1,000 gallons
• IU Master-Metered: $4.76 per 1,000 gallons
• Irrigation: $10.92 per 1,000 gallons
• Wholesale (“Contract Sales for Resale”): $4.49 per 1,000 gallons

Impact on Businesses
​
Large Commercial & Industrial Users

• Rates increase from the low $3 range to $5.83 per 1,000 gallons.
• This represents ~46% increase for many business classes.
• The Chamber has already publicly described this as “dramatic” and urged a more gradual, predictable increase schedule.

Indiana University

• IU, which uses 620 million gallons/year, will see master-metered rates jump 48% to $4.76 per 1,000 gallons.
• IU has not yet stated whether it will formally oppose the increase at the IURC level.

Local Water Utilities (Wholesale)

• Southern Monroe Water and Washington Township Water will see wholesale rates increase 48%, to $4.49/1,000 gallons.

Irrigation Customers

• Irrigation rate increases from $4.92 to $10.92 per 1,000 gallons—a 122% increase.

Why the City Says the Increase is Needed
Per Crowe LLP and Stantec’s studies in the rate-case packet:

• The utility faces an annual shortfall of $6.6 million without new revenue.
• A five-year $84 million capital improvement plan requires new debt capacity.
• Infrastructure priorities include aging water mains, electrical systems, chemical lines, pumps, and the Monroe Water Treatment Plant.
  
  

State law requires municipal utilities to maintain rates that are “nondiscriminatory, reasonable, and just,” ensuring revenue covers system operations, debt service, maintenance, and replacement cycles.

Next Steps: IURC Review (2025–2026)
Ordinance 2025-35 now advances to the Indiana Utility Regulatory Commission (IURC).

• The IURC has up to 300 days to issue a decision.
• The IURC is not expected to rule until approximately August 2026.
  
• Rates will not take effect until the IURC approves the tariff.

---