AP NEWS

Portage water rates to rise by 50 percent

May 15, 2019

MADISON — The cost of water will increase in July by 50% for average residential customers of the Portage Water Utility.

The Wisconsin Public Service Commission recently authorized new rates that incorporate collecting the Public Fire Protection Charge on water bills.

“I imagine we’ll be getting some calls about that, but we did have a public information meeting (May 6) to explain things,” city Finance Director Jean Mohr said Tuesday.

The Portage City Council approved a resolution in March to end collecting the fire protection charge on property tax bills and begin directly billing water customers for the utility’s cost of hydrant maintenance and other expenses it incurs associated with firefighting.

“Now everyone who benefits from the public fire protection will pay for it,” Mohr said.

Churches and other entities that are exempt from property taxes don’t pay a share of the fire protection charge, but will now.

Under the rates approved Thursday, average residential customer currently paying $19.17 monthly for 4,000 gallons of water will pay $28.61 for the same volume when the new bills are mailed in early August. Those bills will included the fire protection charge. Water service, minus the fire protection charge, increased by 21.4% to $23.16 monthly.

Rates for the utility’s commercial, multi-family, industrial and public entity customers will increase between 21.7% and 29.9% depending on customer category and usage, according to the rate order.

Now that the fire protection charge isn’t collected on property tax bills, will those bills decrease proportionate to the increase in water bills? Mohr said those amounts are determined by two different processes, but potentially may result in lower property taxes.

“Property taxes are part of the budgeting process and they could decrease somewhat, but that’s up to city council,” she said.

The fire protection charge amount will increase by 2% to $342,430 up from the $340,796 that had been unchanged for several years.

Some residents told the PSC that they opposed switching the fire protection charge onto water bills all at once. Kris Soderman was “disappointed,” that the council didn’t choose to switch over half of the charge now and the rest later.

“The decision seems excessive, and will impact my monthly budget,” Soderman wrote the PSC.

Kim Flessert wrote similar comments stating the increase was “ridiculous … and not the way this should have been dealt with.”

However, Clifton Lawson, who identified himself as a 91-year-old civil engineer who has lived in Portage about nine years and worked here “on and off” since the 1950s, took the opposite stance. He wondered why the utility took so long to increase rates.

“I see the city water department pinching pennies a lot and how they have been able to keep going with an old, dilapidated distribution system is a wonder,” he wrote recommending the increase.

The PSC noted that Portage’s water bills under the new rates are slightly below average for similar-sized utilities in the state.

The utility’s last comprehensive rate increase was in January 2011, an 18% rate hike for residential customers. In 2015, the PSC authorized a 3% increase under the simplified rate increase process.

Mohr said the city council has discussed having more frequent, but smaller increases in the future.

The new rates will increase utility annual revenue by a projected $314,953 from $1.85 million to $2.27 million. After estimated expenses of $1.72 million, the utility should have a net income of $522,725 and earn a 5.6% rate of return of the value of its infrastructure investment. Under current rates, the utility’s net income would have been $207,772 and a 2.23% rate of return, according to the rate order.