MADISON - The village of Browntown rarely seeks a water rate increase, but now it's asking for a 129 percent rate hike to finance a new well house and put the utility back in the black.
The utility has not filed a full rate case since 1998, although in recent years it has received a few 3 percent increases the Public Service Commission authorized in order to keep up with inflation.
The utility's revenues have averaged about $45,000 annually since 2013, which is about equal to the cost to pump, treat and distribute water.
However, the added debt it will take on to finance a $345,000 well house, plus the cost of replacing some water mains, has the utility in need of more revenue.
The village is replacing its 70-year-old well house which was crumbling and no longer met Department of Natural Resources standards, according to an order the PSC issued earlier this year approving the project.
"It was in shambles," Village President Gerald Miller said of the well house along Old Highway Road. "There was no proper storage for chemicals so they corroded the electronics but now we'll have a modern facility."
Wet weather has delayed well house construction but Miller anticipates the project to be done by Sept. 1.
Miller said the DNR is not requiring the village to have a second well for fire protection in case the one well develops problems.
"There's no way on God's green earth we could (afford) another well. There's no industry here to support the cost and there's been no growth in income. We're a bedroom community, mostly. We have a lot retired people and just paying for the new well house will be difficult for those on fixed incomes," he said.
Average residents currently pay $46.99 quarterly for 9,000 gallons of water. If the rate request is approved as submitted, the quarterly bill for average residential customers would increase to $111.55.
The PSC reviews the rate request and recommends how much revenue the utility needs to remain financially viable. The public and utility can comment on the recommendation at a hearing held in Browntown before final rates are set. The process typically takes several months.
Miller expects higher rates would "shock" some people used to "low rates for years."
"I expect (to get) some complaints but if people want water when they turn on the faucet, it comes at cost," he said.
Miller expects the village board will hold some meetings to inform the residents about the utility's finances and the need for more revenue and the process the PSC uses to set new rates.
The utility projects finishing 2017 with a $31,510 income deficit based on estimated revenue of $46,075 and total expenses of $77,585. Total expenses include depreciation costs of $16,299, a non-cash item, and $14,926 for payments in lieu of taxes, which have rapidly increased since 2015.
In the future, Miller wants the village board to seek water rate increases more often than the 20 years since the last increase.
"We should have done that in hindsight and now we've got a big one all at once. More frequent increases is the most practical way to do it, but we have been too practical here for a while. This is a new board and we're going to do some things differently," said Miller, who has been on the village board three years before being elected village president in April.
The utility has not filed a full rate case since 1998, although in recent years it has received a few 3 percent increases the Public Service Commission authorized in order to keep up with inflation.
The utility's revenues have averaged about $45,000 annually since 2013, which is about equal to the cost to pump, treat and distribute water.
However, the added debt it will take on to finance a $345,000 well house, plus the cost of replacing some water mains, has the utility in need of more revenue.
The village is replacing its 70-year-old well house which was crumbling and no longer met Department of Natural Resources standards, according to an order the PSC issued earlier this year approving the project.
"It was in shambles," Village President Gerald Miller said of the well house along Old Highway Road. "There was no proper storage for chemicals so they corroded the electronics but now we'll have a modern facility."
Wet weather has delayed well house construction but Miller anticipates the project to be done by Sept. 1.
Miller said the DNR is not requiring the village to have a second well for fire protection in case the one well develops problems.
"There's no way on God's green earth we could (afford) another well. There's no industry here to support the cost and there's been no growth in income. We're a bedroom community, mostly. We have a lot retired people and just paying for the new well house will be difficult for those on fixed incomes," he said.
Average residents currently pay $46.99 quarterly for 9,000 gallons of water. If the rate request is approved as submitted, the quarterly bill for average residential customers would increase to $111.55.
The PSC reviews the rate request and recommends how much revenue the utility needs to remain financially viable. The public and utility can comment on the recommendation at a hearing held in Browntown before final rates are set. The process typically takes several months.
Miller expects higher rates would "shock" some people used to "low rates for years."
"I expect (to get) some complaints but if people want water when they turn on the faucet, it comes at cost," he said.
Miller expects the village board will hold some meetings to inform the residents about the utility's finances and the need for more revenue and the process the PSC uses to set new rates.
The utility projects finishing 2017 with a $31,510 income deficit based on estimated revenue of $46,075 and total expenses of $77,585. Total expenses include depreciation costs of $16,299, a non-cash item, and $14,926 for payments in lieu of taxes, which have rapidly increased since 2015.
In the future, Miller wants the village board to seek water rate increases more often than the 20 years since the last increase.
"We should have done that in hindsight and now we've got a big one all at once. More frequent increases is the most practical way to do it, but we have been too practical here for a while. This is a new board and we're going to do some things differently," said Miller, who has been on the village board three years before being elected village president in April.