Quarterly water rates for typical residential customers of the Walworth Municipal Water Utility will rise 18.2 percent or $8.46 in a two-step increase under action Monday by the Wisconsin Public Service Commission.
The increase is the first comprehensive rate hike since 2006 and is subject to approval from the village board, which meets Thursday, said Lisa Rogers, village deputy clerk.
The commission authorized 3 percent increases in 2011 and 2015, which kept pace with inflation, Rogers said.
The new rates will boost the average residential quarterly rate of $46.44 for 12,000 gallons of water to $48.90 for the same amount of water when the first increase takes effect, probably in July, Rogers said.
The second increase will boost the residential quarterly bill another $6 to $54.90, probably in September, she said.
The first increase allows the utility to increase revenue to meet ongoing operating expenses. The second increase coincides with the hiring of another full-time utility employee, most likely in July, Rogers said.
Adding a full-time employee will cost at least $55,000 annually, Rogers said in July, when the village sought the rate increase.
Rates for multifamily, commercial, industrial and public entity customers will see larger increases, ranging from 25.3 percent to 47.3 percent, depending on customer category and water usage, according to the rate order.
The utility was able to avoid significant rate increases for 11 years by borrowing money from the village’s general fund, Rogers said.
The utility owed the general fund $1.5 million in 2017, but it reduced that amount to $1.3 million in 2018, according to the July rate application.
The commission is allowing the utility to write off the debt instead of repaying it, Rogers said.
“The new revenue should allow the utility to meet its expenses and hire a new employee,” she said.
Some expenses the utility will incur include rehabilitating a well and saving money to repaint a water tower, which could cost $100,000 or more, according to the rate application.
Several water customers opposed the rate increase at a March public hearing. They disputed the need for an additional employee and expressed concern about the utility’s finances.
In the rate order, the commission stated the new rates will allow the utility to remain financially viable, and the village forgave the utility’s debt in compliance with state law.
After the second rate increase, the new rates are projected to boost the utility’s annual income by $94,650 to $610,400 and net income from $11,319 to $90,944.