The Utilities Committee met 10/10/2023. One of the items they took up was a 7% wastewater rate increase for general service and hauled waste service to be effective 01/01/2024. This rate increase would affect both residential and industrial customers. The utility had initially projected that they would have a 4% rate increase, but due to inflation, project costs, and chemical costs they now needed an additional 3% increase.
The committee voted unanimously to approve the requested rate increase.
I’ve created a transcript of the discussion for download.
Rate increases for wastewater utilities is based on a number of factors, particularly equipment and facility upgrades. Utility Director Chris Shaw noted that, in theory, a utility could have a rate increase of 100% depending on what kind of upgrades were put in place.
The Appleton wastewater treatment plan was currently in a state of constant upgrading which were being managed with rate increases. Even with the rate increases, Appleton’s rate were still lower than many nearby communities. Per Director Shaw, “I’d say that the wastewater treatment plant is in a good state. We repair, replace the equipment that we have to. You’ve been supportive of that. So, there’s not an issue where we’ve gotten an impending super rate increase, but we do have to cover our expenses.”
The rate increase was driven by the 5 year Capital Improvement Plan. They conducted a study in 2020 that determined what kind of rate increases would be needed to cover the cost of improvements. That study had initially recommended a series of 4% increases, but that had been increased now to 7% for 2024 and 2025. This was because since that study, they had added projects to the Capital Improvement Plan that had not originally been there. Additionally, some projects ended up being more expensive than they had anticipated. Beyond that, they were dealing with the impact of inflation as well as unprecedented turnaround times for equipment that had gone from an 8-week turnaround to a 52 week wait for new parts. Director Shaw did say that some costs were actually starting to come down, but there had been a point when there were a few chemicals they needed that they didn’t even know if they were going to be able to acquire.
Rates were reviewed each year and any increase would be brought to the committee and Council for approval.
Alderperson Chad Doran (District 15) asked if, because of inflation, any thought had been given to trying to move forward more quickly on some of the utility’s upcoming projects to try to get ahead of rising inflation. Director Shaw felt there would be risk in that because costs could come down. He did not think prices were going to continue to go up.
Alderperson Israel Del Toro (District 4) noted that Appleton’s rates were on the lower end of area municipalities’ rates and wondered if Appleton should be looking at a rate increase that put them more in the middle. Director Shaw told him they couldn’t do that because in order to increase the rates they would need to invest in the utility. So they would have to replace equipment when it didn’t really need to be replaced or doing things they didn’t need to do.
The committee voted 4-0 to approve the requested 7% rate increase.
View full meeting details and video here: https://cityofappleton.legistar.com/MeetingDetail.aspx?ID=1120217&GUID=BA4BBBBE-D950-4F6C-9CB6-28727718D11C
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