Application process moves forward
Utility prepares to apply for water rate increase
Wednesday, September 11, 2013 7:00 PM
MARINETTE - The next steps toward completing a water rate increase application are already in the works, according to Thomas Karman, the auditor assigned to the Marinette Water Utility.
Karman said he is currently formulating reports to summarize the Water Utility's current financial status and its estimated financial situation for the next two years. These reports are part of the Wisconsin Public Service Commission's (PSC) guidelines toward applying for a rate increase application.
"I don't have that information," Karman said when asked how much of an increase is expected. "They (PSC) will look at our status and our estimates, they'll look at what major projects are coming up and base the increase on what the utility needs."
During a joint meeting between the city council and the Water & Wastewater Utility Commissions on Monday evening, the commissioners unanimously voted to approve a rate increase application.
At the meeting, Kathy Cleven, Marinette's financial director, said that the water rate should have been increased much sooner than this to compensate for the decrease in demand within the city as well as the increased spending in capital projects.
"They should be reviewed and submitted on a yearly basis. Things just change, that is just the way it is," she said.
Tim Peterson, Water Utility administrator, said he hopes this will be the last big increase imposed on Marinette.
"We've been working hard on making our facilities eligible for this program that allows us to submit a shortened application as long as we have a rate evaluation every five years," he said. "After this evaluation, we should be able to submit a yearly application to raise the rate in accordance to the cost of living instead of these huge jumps."
Karman said he expects to have the application completed before the end of September, but that it depends on the availability of Public Service commissioners as to how long the rest of the process will take. He added that it could take 60 to 90 days for commissioners to review the reports and generate a rate they feel is appropriate for the area.
When the before the new rate is announced, the public will have the chance to voice their opinions directly to the PSC during a public hearing. The hearing will take place in Madison, Wis., but there will be a telephone connection at the Water Utility building that people will be able to utilize. The hearing will be announced through the media as well as a mailing and email address that the public may use for their comments if they are unable to attend the hearing.
The rate increase is only one part of a currently two-step process the Water Utility is using to generate funds to pay back $1.5 million to the City of Marinette.
The second step is a loan the Water Utility will be applying for with the bond market. The utility plans to borrow the money to pay their debt to the city. However, according to Jon Sbar, Marinette city attorney, the city council still has to approve the borrowing of the money.
The Water Utility discovered its $1.5 million debt to the City of Marinette during a joint meeting with the city council and the Water & Wastewater Utility Commissions in early August. The debt came from the stormwater and refuse fees the utility collects for the city but were not forwarded to the city accounts and was aggravated by several money management issues at the utility. The second joint meeting that took place Monday was the council and commissions' first step to solving the debt and money management issues.