MADISON — The village of Blanchardville is seeking an approximate $18 — or 60% — increase in water rates to fund replacing water mains in six streets next year.
Average residential customers currently paying $29.21 monthly in volume, meter and public fire protection charges for 3,000 gallons of water would pay $48.05 for the same amount of water if the Public Service Commission approves the application as it was submitted on Friday.
The village is replacing water and sewer mains on Locust, Pine, Curve, E. Olson, Line and Cross streets next year at a total estimated cost of $3.4 million. The water utility portion of the project is estimated at $1.81 million, which includes upgrades to two well houses plus controls and communications equipment.
Sewer mains also will be replaced in the six streets at an estimated cost of $1.58 million. The village sets sewer rates without PSC approval. A 3% increase in sewer rates will become effective later this month, the first increase needed to finance replacing the sewer mains, said Village Clerk Amy Barnes.
“We’ll have another wastewater rate increase in 2020 or the near future,” said Barnes, who declined to speculate on the increase percentage that the sewer utility will ultimately need.
Asked how she thinks the public will respond to the requested 60% increase in water rates, Barnes said it will be a “bite for some.”
“I’m sure it will be a little struggle for some ... but we’re undertaking a large infrastructure project which gives people safe water and sewer service. The water and sewer utilities are not funded by tax dollars, their income is based on usage,” she said.
The village will soon contact residents directly affected by the street reconstruction and will discuss the need for the project with the community in the near future, Barnes said. The sewer and water mains are aging and need to be replaced to prevent leaks and costly repairs.
“We’re doing this on our own volition, no one is pushing us on this … but it’s time to replace these mains,” Barnes said.
The village has been approved for a U.S. Department of Agriculture Rural Development loan for both infrastructure projects. The 40-year loan has a 3.12% interest rate and forgives $1.45 million in principal payments.
The projects are scheduled to be bid early next year and construction is to begin in the spring and be completed before the end of the year, according to the village.
The water utility would probably need more revenue without the water main project, Barnes said. The utility projects a $20,315 income deficit next year after estimated revenue of $185,315 and expenses of $205,468, according to the rate application.
“The utility isn’t going to meet its debt obligations and ongoing operations expenses. Material costs go up, the cost of insurance goes up,” she said in support of the rate request.
The higher rates would boost revenue by $111,695, earning the utility a net income of $91,380 and a 4% return on the value of its infrastructure.
Barnes anticipates the PSC setting new rates in six to nine months, during which time PSC staff reviews the rate request, determines how much money the utility would need to stay financially viable, and hold a public hearing simultaneously in Madison and Blanchardville.