The Ladysmith Finance Committee met Aug. 17, discussing the impact a 21 percent sewer rate increase could have on customers.
Deputy Clerk/Treasurer Tony Devine presented cash flow requirements for the city’s sewer department that were prepared by April Anderson of the professional services accounting firm CliftonLarsonAllen. It summarized the cash requirements for sewer department operations, debt service and replacement of sewer department assets.
Also included was $43,000 in “recovery” funds that are intended to replace the losses that have occurred over the last few years of operating at a deficit. Total cash requirements for a year’s operations with these assumptions is $959,701.
In 2020 revenues from services generated $803,243, and with no significant change in sewer demand, this is expected to remain static.
Anderson advised to cover all assumptions, a 21 percent increase would be needed.
Concerns expressed involved the impact of a 21 percent increase on customers.
Ald. Marty Reynolds offered the idea of increase by a set percentage over several years.
Devine will work with Anderson to get some more detailed options of percentage increase combinations that would minimize the impact on sewer customers.
The committee will then revisit this matter.
Discussion and possible action to recommend to Council replacing damaged squad car with 2015
In other matters, the committee discussed the police department’s 2018 squad car that was rear-ended and totaled this summer. Replacing a squad car matching the one that was totaled requires a wait of 6 to 8 months. There is a Tahoe available from Ewald immediately for $5,710 above the insurance recoveries. Due to a staffing shortage, the police department will come in under budget for 2021. It was decided the 2021 budget set, and being over on one line item and under on another, doesn’t need city council approval as long as they are within approved amounts.
The 2022 budget for the police department was presented at a total of $982,845. In general, the expenditures are similar to 2021. Wages and fringe are expected to be higher due to a full staff, and previous years had understated fringed in budgeting.
The finance committee makes spending recommendations with the final budget approved by the city council.
The new proposed sewer rate hike discussion takes placeless than one year from a steep water rate increase for city residents.
Last November, the Ladysmith Municipal Water Utility filed an application with the Wisconsin Public Service Commission, requesting an estimated rate hike of about 50 percent for the average residential customer. The water bill for an average residential customer with a 5/8-inch or 3/4-inch meter who uses 9,000 gallons of water per quarter will increase from $63.95 to $97.17, or 52%, not including the public fire protection charge.
The proposal called for residential billing hikes ranging from 49.79 percent for a small user to 58.37 percent for the largest user.
The city’s application stated the increase was necessary due to a 99.68 percent increase in gross plant investment and a 64.62 percent increase in operating expenses since the last water rate case was completed in 2013. In the utility’s last rate case, the PSC included construction costs for Well No. 8, a water treatment plant and a raw water main that were authorized by the Commission.
The total increase in water revenues requested was $468,750 that will result in an estimated overall rate increase of 49.53 percent over the water utility’s present revenues, comprising of a 53.32 percent increase in general service charges and a 42.03 percent increase in Public Fire Protection charges. This breaks down to $334,929 coming from general service customers and $133,821 coming from the PFP charge.