Cloverdale Considers Food and Beverage Tax to Fund Wastewater Debt

From the Greencastle Banner-Graphic:

The Cloverdale Town Council recently held a special meeting to discuss the issues relating to the upcoming change in utility rates.

In a recent utility rate study done by O.W. Krohn & Associates, the town found that it has little choice but to do something drastic to keep itself from going deeper in the hole as Cloverdale is currently at nearly $3.3 million in wastewater debt.

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Buzz Krohn presented the board once again with a variety of options to help alleviate the financial strain, as the town must bring in a minimum of $904,000 to maintain a coverage ratio of 125 percent. This ratio is to cover the bonds in case of a default. The town is currently bringing in around $745,000 per year.

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Krohn presented the board with such options as a flat rate increase for all residents and commercial properties as well as an increase based on usage.

However, the council has decided to go with a suggestion made by Don Gedert of attempting to create a food and beverage tax.

"Instead of raising rates really high we are going to start adding a surcharge on bills," explained Galloway. "This is a temporary surcharge until the food and beverage tax kicks in."

This new food and beverage tax must go though legislation before the town of Cloverdale can do anything with it. Towns such as Shipshewana have already enacted such a tax.

"The food and beverage tax targets this very problem," said Gedert. "Give me a chance to get the state law equalized for everybody in Indiana so not just us, but anyone can have a food and beverage tax. We need to equalize the playing field."

Gedert plans on putting pressure on state legislators after the election, if successful the food and beverage tax would go into effect as soon as July.

This new tax would help pay for the town's sewer and water bills by charging a certain percentage on all food and drinks bought at such places as fast food restaurants and bars.

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The next Cloverdale town council meeting will be held on Tuesday, Sept. 11 at 7 p.m.

http://www.bannergraphic.com/story/1889352.html