MONROE - The Board of Public Works Monday sent an average water utility rate hike of 29 percent to the Common Council for consideration, without a stamp of approval.
"Let's just get it to council," board member Mark Coplien said. "It's going to have to be discussed there anyway."
The rate hike is expected to be approved by the Wisconsin Public Service Commission during a telephone hearing at 9 a.m. Wednesday, the council will meet at 7 p.m.
Water Utility Supervisor Mike Kennison said the 29 percent increase will result a $52.16 water bill for the average residential customer, or about 14 cents per day.
The hike was not out of line with other communities, Kennison said.
"Other communities are getting a rate increase of well over 30 percent - up to 70 to 80 percent," he said.
Board members, still uneasy about recommending the rate increase to council, asked why PSC authorized rate increases only every four to five years, and why rates cannot be spread out so customers are not hit with significant increases.
Kennison said the PSC told him he could not split the rate hike over a two-year period.
"(However) PSC likes us to return for cost of living increases every year," Kennison said.
The commission authorized a cost of living increase of about 3 percent for Monroe Water in mid-2008. The utility received the simplified rate increase, because the utility's rate of return stood at 1.3 percent. PSC authorizes a minimum 6.5 percent rate of return.
The PSC considers a full rate increases only when a utility's rate of return, based on the utility's investment in facilities and equipment, falls below 6.5 percent.
The increase will give the water utility about $382,246 in annual revenue.
The large increase in revenue is the "result of a 28 percent increase in gross plant investment and a 34 percent increase in operating expenses" since 2004, according to the PSC.
Monroe's last full water rate hike was in 2004, when customers saw water and fire protection costs increase 7 to 11 percent, giving the water utility about an 8 percent rate of return.
The commission predicted the new 2010 rate will put the Monroe utility back at its 6.5 percent rate of return.
Coplien said he believed the utility's annual property taxes of about $200,000 should be reconsidered, and possibly reduced or eliminated.
"I know, that's money you have to find in other places (in the city budget)," he said. "But It still seems like double taxation to me."
Kennison said the elimination of property taxes would help the water utility considerably.
The new rate increase includes about $181,000 for replacing some water mains during the 8th and 9th streets reconstruction project.
That project has been postponed until next year, partly to include replacing all water mains along the route from 7th Avenue to 20th Avenue.
Kennison cannot make any changes in the water rates to compensate for the extra cost of postponing the water infrastructure work, so aldermen are going to have to consider how to provide about $350,000 extra to the project.
"The grants we are going after will cover about 25 to 30 percent of 8th and 9th streets (water main replacements)," Kennison said.
The city was unable to apply for some grants earlier because of a delay in the city's 2008 budget audit.
The Monroe Water Utility filed a PSC rate application, seeking a 35 percent rate increase based on 2010 test rates, Nov. 18, 2009. The PSC refined and narrowed the rate.
"Let's just get it to council," board member Mark Coplien said. "It's going to have to be discussed there anyway."
The rate hike is expected to be approved by the Wisconsin Public Service Commission during a telephone hearing at 9 a.m. Wednesday, the council will meet at 7 p.m.
Water Utility Supervisor Mike Kennison said the 29 percent increase will result a $52.16 water bill for the average residential customer, or about 14 cents per day.
The hike was not out of line with other communities, Kennison said.
"Other communities are getting a rate increase of well over 30 percent - up to 70 to 80 percent," he said.
Board members, still uneasy about recommending the rate increase to council, asked why PSC authorized rate increases only every four to five years, and why rates cannot be spread out so customers are not hit with significant increases.
Kennison said the PSC told him he could not split the rate hike over a two-year period.
"(However) PSC likes us to return for cost of living increases every year," Kennison said.
The commission authorized a cost of living increase of about 3 percent for Monroe Water in mid-2008. The utility received the simplified rate increase, because the utility's rate of return stood at 1.3 percent. PSC authorizes a minimum 6.5 percent rate of return.
The PSC considers a full rate increases only when a utility's rate of return, based on the utility's investment in facilities and equipment, falls below 6.5 percent.
The increase will give the water utility about $382,246 in annual revenue.
The large increase in revenue is the "result of a 28 percent increase in gross plant investment and a 34 percent increase in operating expenses" since 2004, according to the PSC.
Monroe's last full water rate hike was in 2004, when customers saw water and fire protection costs increase 7 to 11 percent, giving the water utility about an 8 percent rate of return.
The commission predicted the new 2010 rate will put the Monroe utility back at its 6.5 percent rate of return.
Coplien said he believed the utility's annual property taxes of about $200,000 should be reconsidered, and possibly reduced or eliminated.
"I know, that's money you have to find in other places (in the city budget)," he said. "But It still seems like double taxation to me."
Kennison said the elimination of property taxes would help the water utility considerably.
The new rate increase includes about $181,000 for replacing some water mains during the 8th and 9th streets reconstruction project.
That project has been postponed until next year, partly to include replacing all water mains along the route from 7th Avenue to 20th Avenue.
Kennison cannot make any changes in the water rates to compensate for the extra cost of postponing the water infrastructure work, so aldermen are going to have to consider how to provide about $350,000 extra to the project.
"The grants we are going after will cover about 25 to 30 percent of 8th and 9th streets (water main replacements)," Kennison said.
The city was unable to apply for some grants earlier because of a delay in the city's 2008 budget audit.
The Monroe Water Utility filed a PSC rate application, seeking a 35 percent rate increase based on 2010 test rates, Nov. 18, 2009. The PSC refined and narrowed the rate.