Water utility rate hike proposal

Posted: Tuesday, March 4, 2014 -- 8:55pm

The Madison Water Utility is getting ready to request a water rate increase, meaning water utility customers will likely see a jump in their water utility bills.

Tuesday night, Madison Water Utility gave a presentation to Madison City Council regarding the municipal services bill.

Every year, Madison Water Utility is required to make a PILOT (Payment in Lieu of Taxes) payment directly to the City of Madison instead of paying taxes.

Money for that payment comes out of the pockets of water utility customers. Currently, 16 percent of each Madison Water Utility customer's bill goes to cover the PILOT payment.

But, the PILOT payment is expected to go up by about $600,000 each year. The payment is based on the utility's infrastructure and are property tax rates, so as things like aging water mains get replaced, the payment gets bigger.

The utility payment to the city has been an issue for the past several years. In fact, this payment has gone up by 84 percent since 2005.

"The board has kind of set a policy already that they would like to see rate increases be kept to a manageable level. Certainly nine or 10 percent per year, nothing more than that. And so we have to sort of base our program on that and hopefully we can keep the water main breaks to a manageable level” says Tom Heikkinen, Madison Water Utility General Manager.

The utility board is getting ready to submit the proposed increase to the Wisconsin Public Services Commission. The board is hoping to have a rate increase in place by the end of the summer.

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