MONROE - The city is seeking a water rate increase of 17 percent, or an average of about $1.35 more per month for each household's water bill, to help build reserves to fund future infrastructure projects.

The city council will hear about the rate case application from Ehlers Financial at 7:30 p.m. Tuesday, Aug. 20, at city hall. An Ehlers' representative will present the financial information and answer questions from council members.

The city's Board of Public Works approved hiring Ehlers in April to complete both water and wastewater rate studies. Ehlers and city staff completed the water rate application and submitted it to the Public Services Commission Aug. 1 for its review and finding.

According to Monroe Utilities Director Alan Eckstein, the rate increase will help the water utility maintain its PSC-authorized 5.25 percent "rate of return," which is revenue, in excess of operating expenses, for infrastructure upkeep and replacement projects. The amount of extra revenue is calculated on the utility's investment in its infrastructure, about $7 million.

The water utility needed an additional $253,000 in revenue for 2013 to meet those standards, Eckstein said.

This 2013 rate case will petition the PSC to determine the appropriate level for water rates for the upcoming year, which will then be brought before the city council. Generated revenue must be sufficient to support operations, maintenance and capital expenditures while maintaining the financial stability to obtain financing, when necessary, at the least cost, Eckstein said.

The Board of Public Works sent a PSC-authorized rate increase of 29 percent to the council for consideration in February 2010. That would have increased bills by an average of 14 cents per day. The council voted 7-3 to approve an increase of 16.1 percent in March, which gave the water utility an underfunded 3.5 percent rate of return.

Eckstein said the water utility now must also prepare to replace miles of water mains within the next 10 years, upon the direction of the Department of Natural Resources this spring during its sanitary survey.

"We have to put more money into our pipes," Eckstein said. "The water mains are substandard. Fifty percent are almost a 100 years old and 4 inches in diameter."

Fire Chief Daryl Rausch has reported in the past that small water mains are limiting the fire department's ability to fight fires. Even though the water mains replaced around the Square in 2009 were of the modern, standard 10-inch diameter, the older, 4-inch mains coming into the Square reduce water pressure.

Monroe has about 60 miles of water mains. How much of the entire infrastructure will have to be replaced is being determined now. The water department has been mapping major water breaks for about two decades. Eckstein said a pattern is apparent: Breaks are following the ages of city sections as they were developed.

The engineering and planning firm of Short Elliott Hendrickson Inc. is currently developing an infrastructure replacement master plan, which will be used in conjunction with the street repairs and construction master plan, Eckstein said.

Cost for replacing the mains, including hydrants and values, averages $190 per foot.