Germantown — Germantown residents will see a 3 percent increase to their next water bills after a Village Board decision Monday.
In a 7-1 vote with Trustee Art Zabel opposed and Village President Dean Wolter absent, village officials passed a 3 percent simplified rate hike to increase the utility's rate of return.
On Aug. 5, the village's financial adviser Baker Tilly Virchow Krause recommended that the village implement a simplified rate increase that was allowable based on the 2010 full rate study. The Public Works Committee recently approved allocating funds in 2014 for a new full rate study.
Because the village plans to hire a firm to conduct a study in 2014, Zabel voted against the rate increase. There is a good chance a rate study could result in a rate hike as well, he said.
Department of Public Works Director Dan Ludwig, who brought the item in front of the Village Board, said a study typically takes nine months. To increase the village's rate of return, he recommended the increase now. In 2011, the utility produced a 0.9 percent rate of return. In 2012, there was a 0.03 percent rate of return.
Zabel also voted against the item because he said the water utility has $1 million sitting in the bank.
"We lost almost a full percent of our rate of return," Ludwig said. "Yes, there is money in the bank. Are we healthy? We're sliding."
Trustee Terri Kaminski said the Village Board has historically planned ahead and they should continue to do so. By doing a simplified rate increase now, they can avoid hitting residents with a large increase in the future.
"My feeling has been the same all along when it comes to water," Kaminski said. "We need to prepare for the future. We do need this rate increase now."
This is not the first time the Village Board has discussed water's ties to the future development of Germantown. In April, the board approved hiring a consultant to locate a site in the village for a potential new shallow well to accommodate future growth and ensure there is enough water to serve the village. It can take two to five years to locate a shallow well and get it into production. Should a suitable location be found, the village will have to discuss how to pay for its construction when the time comes.
Ludwig said after the full rate study is complete in 2014, another adjustment to water rates may be necessary.
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