Department of Public Works

Water Project and Rate Impact: Village of Arlington Summary of Water Project and Rate Impact In 2018, the Village of Arlington Water Utility water samples were found to contain nitrates at concentrations exceeding the Safe Drinking Water Act maximum contaminant level (MCL) for nitrates. The Village reached a consent order with the DNR that required the Village to take corrective action to reduce nitrate levels. The Village was given four options (see PSC Final Decision for Well 4 Construction for more details), with the most cost effective option being to construct a new well at an estimated cost of $2,478,000. The PSC Final Decision for Well 4 Construction, estimated the impact of rates for this project to be a 182% Increase. The Village approved applying for an application for funding the project with Department of Administration Safe Drinking Water Fund (SDWF) loans. They were approved for a loan at a rate of 2.035%. The Department of Administration required the Village to complete a water rate increase study with the Public Service Commission (PSC) to have rates increased at a level to fund the future debt repayments for the SDWF loan. The Village applied for a rate increase with the PSC and during the process, they worked with the PSC to keep the rates as affordable as possible, while meeting the operating costs and debt service payments of the water utility and also meeting the requirements from the DOA for the SDWF loan. The Final Decision from the PSC noted an overall rate increase of 72.05%, which was much lower than the PSC predicted in the construction authorization. The Village public fire protection charges (PFP) before the rate case with the PSC was $81,506, and was paid by property taxes. The Village PFP charge with the new rates was increased to $140,137. Since the Village is subject to levy limits (sec. 66.0602, Wis. Stats.) they are not allowed to increase taxes to pay for the additional PFP charge, therefore the additional $58,631 was placed as a direct charge on the water bills. It is important to note that the Village had the option to move all $140,137 to a direct charge, but they opted to keep the original amount funded by levy to lower the impact on the water bills. Many utilities are opting to move all of their PFP to a direct charge on the water bills to make room in the general fund budget for increasing expenditures.