Village To Ask PSC For Fire Protection User Fee

The Village Board wants to strip the public fire protection charge out of the tax levy and make it a separate user fee so that all Caledonia property owners pay rather than just water customers.

The change still needs approval from the Public Service Commission (PSC) before it goes before the village board for a final approval. However, the village board approved a motion Monday night that allows staff to submit the change request to the PSC.

On average, single-family homeowners pay about $65 per year for the water supply infrastructure the fire department uses to put out fires. The fire protection charge does not include the cost of the firefighters and firefighting equipment, which is paid for in the village’s budget.

“For existing water customers, you are going to see less on that portion of the bill because it’s going to be divided up across the board with all properties paying,” said Bob Bradley, the village president.

The biggest change, if the PSC approves it, will come from of tax-exempt properties having to pay the charge. Unbuildable or state-owned land, however, will still be exempt, explained Village Administrator Mark Janiuk.

“This is not a new charge, we’ve been obtaining it for many years and that’s because the water utility is set up not only for water consumption and sanitation, but also to provide water for fire protection,” Janiuk said. “Everyone benefits from the water system and the ability to provide water in an emergency.”

But, Caledonia Utility District Manager Bob Lui told the board that they the needed to be prepared for the community to ask questions.

"Let me be clear, there's going to be this charge on corn fields, and hay fields,” he said.

Janiuk explained that the reason for the change is because the village froze the water utility budget as a result of the state imposing levy limits on what municipalities can charge taxpayers. The fire protection fee has increased each year and has started to eat into the water utility levy, which would not have left enough money to cover any of the utility's debt payments.

In a memo to the village board, Janiuk wrote:

In fact, it is expected the PFP will soon exceed the $1,018,851 of tax levy funds that the Village currently levies for the benefit of the Utility. Dave Wagner, from Ehlers has opined this could occur as soon as 2014.

If the PSC approves the change, current water customers would be billed the separate charge on their tax bills starting in December 2013.

The change also allows the village to:

• avoid a full water rate increase in 2013-2014, which would have increased water user fees by about 6.8 percent;
• allows the village to phase out the water utility tax levy between 2015 and 2029 as the utility's remaining general obligation debt is paid down; and
• allows the village to pay for the up-front costs associated with executing the  long-term wholesale water agreement with the Racine Water and Wastewater Utility.

Dave Wagner, of Ehlers & Associates, said the revenue would pay for $1.275 million of the Kremer subdivision water main rehabilitation and future water system improvements.