Portage council OKs collecting fire costs from water users

April 2, 2019

If the Public Service Commission of Wisconsin approves, the water bills of the average Portage residential customer will increase by 50 percent, to help pay for fire protection.

The Portage Common Council on Thursday approved shifting the way the city collects the state-required cost, about $342,000, for public fire protection, from property taxes to making it part of water users’ bills.

Council member Bill Kutzke, who cast the sole dissenting vote, said he doesn’t necessarily oppose shifting the costs of fire protection to water users – which, in effect, allows tax-exempt water users, such as Columbia County and the Portage Community School District, to share in the cost of fire protection from which they benefit.

But for residents and businesses that pay both property taxes and water bills, this could be an undue burden, Kutzke said.

“I think it’s untenable to whack our rate payers with a 50 percent increase,” he said.

City Administrator Shawn Murphy said state law allows municipalities to collect the annual public fire protection cost (set by the PSC with a mathematical formula) either via property taxes or water bills, or a combination of both. The city has been collecting the money from property taxes.

The shift to water bills is proposed to be part of the water rate hike request that the city has pending with the commission. It’s the first full rate increase request since 2011.

Even without the additional collection for fire protection, the typical residential water user, who uses an average of 4,000 gallons per month, would see the average monthly water bill go up by about 21.45 percent.

Factor in the fire protection costs, and the increase would be 50 percent, from $19.07 to $28.61 per month, according to information Murphy distributed to the council before Thursday’s meeting.

Portage water rates are determined partly by fixed costs and partly by water usage. Meter size also is a factor; most residential users have a 5/8-inch meter.

For an industrial water user, who uses 4.75 million gallons per month, the rate increase, with the fire protection cost included, would rise about 23.3 percent.

Council member Mark Hahn, a member of the council’s Finance and Administration Committee, said the panel had considered having half of the required $342,430 in revenue come from property taxes and half from water users.

That might have lessened the “double whammy” of a rate increase and an additional charge for water users, but then, the city would still have to assess property taxpayers for half of the fire protection costs, Hahn said.

But, countered Kutzke, shifting the burden for fire protection from property taxes to water bills will not result in a drop in property taxes.

“Whatever we do, it won’t be a zero sum for the people,” he said.

Murphy noted that the city’s property tax rate is set independently of utility rates – and that rising property values have, in the last two years, resulted in the city’s mill rate (the amount of property tax collected per $1,000 valuation) going down.