Darien seeks 54 percent water rate increase

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Kevin Murphy/Special to The Gazette
Friday, August 9, 2013

MADISON--Water bills for Darien residents would increase 54 percent--about $5.84 a month--if the Wisconsin Public Service Commission approves the utility's rate request as submitted Wednesday.

Residential customers paying $10.29 a month for 3,000 gallons of water would pay $15.84 for the same amount of water under the rates requested.

Residential customers also pay a monthly meter charge of $10.36, which also could be adjusted by the commission.

The commission granted the water utility a 3 percent increase in May conditional on the utility submitting a rate increase within the year, Village Administrator Diana Dykstra said. The previous increase was at least five years ago, she said.

The new rates would boost revenue by $153,426 annually, according to the rate application.

Without the new rates, the utility projects finishing 2013 with a $61,528 income deficit, based on revenues of $289,970 and expenses of $351,498. The deficit includes $132,148 in depreciation expense.

“The utility has been able to pay its bills, but time is catching up, and we'll need a rate increase,” Dykstra said.

Operating expenses have increased from $190,544 in 2010 to an estimated $209,500 this year while revenues have risen from $265,879 in 2010 to an estimated $289,970 this year.

Even with the higher requested rates, Dykstra said, Darien should continue to have lower-cost water than neighboring communities.

She found that the villages of Fontana and Williams Bay each have higher meter and volume charges, the village of Sharon has a higher meter charge and slightly lower volume rates, while the village of Clinton has the lowest meter and volume charges of the area municipalities she surveyed.

Two failed residential developments, The Ponds and Winfield, have had some of the biggest impacts on the village and water utility, said Dykstra. A tax incremental district was created to finance a water tower and supporting infrastructure sized for the new developments, but only four of The Ponds planned 250 homes and none of Winfield's 200 condominium units were built. That left the city's general fund--not water customers--to pay for the new tower and infrastructure, Dykstra said.

The TIF district has begun to repay the water utility for the new infrastructure improvements, Dykstra noted.

The Gazette was not able to reach Mayor Kurt Zipp for comment Friday afternoon on the rate application.

The commission is expected to take action on the rate request by year's end after commission staff reviews the request, makes a revenue recommendation, which the village can contest, and holds a public hearing.

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