Expect Your Water Rates to Jump, Wauwatosa

It has nothing to do with the current drought, and nothing to do with global warming.

A likely 11.41 percent increase in your water bill – $9.05 per quarter, or just over $36 a year for the average household – has everything to do with the rather arcane way water utilities are allowed to regulate their rates.

Water utilities in Wisconsin have to go to the state-level Public Service Commission to get approval for anything more than a marginal increase in rates, a process called the "conventional rate case application."

Municipalities tend to do that only when they start to lose money on water service, which typically happens about every five years or so.

The Wauwatosa Water Utility last applied for such an increase from the PSC in 2006, and it was granted. That increase was about 14 percent.

In the meantime, the city has imposed only one "simplified rate increase," an interim measure allowed by state law to increase water rates by no more than 3 percent or the cost of living.

And, in the meantime, costs have increased.

As a result, the Water Utility is reporting an operating revenue loss of about $28,000 through May of this year – and has asked for approval of another "conventional" increase to send to the PSC for review.

"It's timely for us to submit" to the PSC, said Water Superintendent James Wojcehowicz. "As long as I've been here, we were in the middle" of average municipal water rate charges.

"We're now low," he said.

Why can't we smooth the flow of rate hikes?

There's no question about that. Municipal water utilities are supposed to be self-sustaining, paying for themselves while neither making a profit or taking a loss. And going to the PSC from time to time is the route they use to rectify that position.

Wojcehowicz even compiled a chart showing that Wauwatosa rates low in water bill increases compared to 73 Wisconsin municipalities over the last decade.

But Ald. Jill Organ wants to know why the "simplified rate increase" provision couldn't be used annually, or at least more often, to smooth the increasing cost of water service, as opposed to bumping it up sharply in five- or six-year increments.

Wojcehowicz said the Common Council could do that, keeping in mind only that his department needs to go to the PSC for a larger increase now, because it's operating at a loss, and that the city can't ask for a simple rate increase within one year after that (by state law).

Organ said she still would like to see a more steady, incremental rate structure in the future, and City Administrator Jim Archambo supported her notion, saying that "smaller, more frequent increases are more desirable than large and infrequent increases because of the need to go to the PSC."

With that, the Budget and Finance Committee unanimously approved a motion to forward the rate increase request to the state PSC, but with the provision that in the coming budget cycle, a more regular, self-regulated water bill system be explored.