Good news/Bad news (We're getting a new waste water treatment plant but we're also getting a $10 million bill)

 

Coming to us by 2024 (conceptual drawing)

Hopefully by now you've heard the news: Recently Chetek was the recipient of a ten million dollar grant from Rural Development. It is the largest public works grant of its kind in Wisconsin history which will be applied toward the new waste water treatment plant that will begin to be built sometime in 2023. That's the good news.

Now here's the bad news: the project is expected to cost a little over twenty million dollars. So, yes, we got the thing for 50% off but we still have to fund ten million dollars of the project. That means our sewer rates will go up over the next three years to pay for our $338,000 annual loan payment. And by ordinance the only way to pay for a new sewer plant is through sewer rates.

That's a lot of Benjamins!

How much will they go up? On average, the increase to our individual sewer rates will be 23.3%/year for the next three years translating to a 70% total increase (ONLY to our sewer rates, not on our entire utility bill). What that means is that the sewer usage fee will increase from $6.13 per 1,000 gallons to $10.40 by 2024.

I asked Carmen to put an example together and here's what she offers:

Based on current rates with a household using 4,000 gallons of water per month:

Water	13.24 (water usuage – 4 x 3.31)
WTRBS (water rate base)	10.00 (water base fee)
Sewer	24.52 (sewer usage fee 4 x 6.13)
SWRBS (sewer rate base)	14.67 (sewer base fee)
PUBFR (public fire protection)	8.22 (public fire protection fee)
STORM	2.75 (storm water fee)
GARBG	18.50 (garbage fee)

$91.90 current total monthly charge

To estimate your new bill after the increase in September 2022:

Water	13.24 (same as above)
WTRBS	10.00 (same as above)
Sewer	30.23 (take your above sewer charge x 123.3%)
SWRBS	18.09 (take your above sewer base charge x 123.3%)
PUBFR	8.22 (same as above)
STORM	2.75 (same as above)
GARBG	18.50 (same as above)

$101.03 projected total monthly charge

You may have a couple of questions that come to mind and here's a few I thought of:

We wish

Why now? Why do we need a new waste water treatment plant given that the present one is working well?

Given that it's nearly 40 years old, it is working well but it no longer meets the Department of Natural Resources' (DNR) requirements for effluent (what we put back into the Chetek River after its been treated) nor could it even if we chose to do a “remodel” instead of a “new build”. What's more if something breaks, it is increasingly difficult to find replacement parts given its age. So why now? Because the DNR will no longer give us a “free pass” on the level of phosphorus that returns to the river after the water has been treated. We are on the clock and they are insistent that we get it fixed.

Knowing that this was coming why didn't the city set aside monies for the inevitability of this project?

While we knew this day was eventually coming (nothing lasts forever after all) to just blindly increase sewer rates is neither practical or responsible as we didn't know, say, ten years ago what kind of plant we were going to need or what kind of requirements the DNR would insist on. While you can save for a $20K house (if you can even find one at that price!) you cannot save for a ten million dollar one.

Other than the amount, why is the Rural Development grant such a big deal?

Eligibility for grant money is based on an equation that factors in community need, community median income, current rates, revenues, expenditures and how much fund balance a community has in their sewer utility. Based on those criteria, we were eligible for the very substantial grant from Rural Development that we have been awarded. If forty years ago we had been able to discern and estimate that it would cost us $10 million in 2022 monies and began putting that money aside then by charging residents higher rates year after year, most likely utility customers would have paid for the entire $20 million through rates paid over forty years and we wouldn't have been eligible for the $10 million grant. Since no one has access to a crystal ball, however, the argument is mute. There is just no way to know what your costs will be a generation out.

When does this all start?

Coming to our mail box
by this September

At the May 2022 city council meeting it was the unanimous decision of the council to implement a three-year step program beginning September 1^st. That means that we should expect our sewer rates to increase by 23.3% this September. In September 2023, we should expect them to increase again by 23.3%. And then in September 2024, we should anticipate a third and final increase of 23.3%. The idea is to wade into the water rather than plunge into it.

We appreciate the fact that this information you just read may provoke further questions about your individual water bill. Please don't hesitate to call City Hall at 715-924-4838. We don't relish the fact of increasing your monthly utility bill but unfortunately it's the price of doing business for any municipality regardless of its size.