The Utilities Committee met 10/22/2024. During that meeting, they voted to approve a 9% increase to the wastewater utility rate. They also discussed the proposed 2025 budget for the Utilities Department which touched on some of the factors driving rate increases.
I’ve prepared a transcript of the discussion for download:
The wastewater utility was asking for approval of a 9% rate increase. Back in 2020, Trilogy Consulting had completed a comprehensive rate study. Part of the recommendations that came out of that study was for the utility to implement a one-time 20% increase and then to review and increase its rates annually thereafter. At the time, they had planned to implement rate increases of 4% annually, but that was no longer enough to cover debt and meet cashflow needs. So, the utility wanted to implement a 9% increase instead.
Kellie Rindt, the account manager for the Utilities Department, told the committee that the initial 4% increases had been based on the capital projects that had been planned at the time of the study. Since then, project costs had increased, and they had also added additional projects.
She also said the 9% increase was partially driven by the cost of digester maintenance that needed to be done in 2025. Alderperson Chad Doran (District 15) confirmed with Utilities Director Chris Stempa that the digester maintenance was not related to the Polymer Incident.
The committee voted unanimously to recommend the 9% rate increase be approved.
Director Stempa discussed the 2025 Utilities budget which tied in with the discussion about the rate increase. He said that currently, the utility was “in a significant project mode” and were still wrapping up projects that had started 2 years ago. The backlog of projects was caused by Covid-related supply chain issues that made getting certain essential parts difficult.
Additionally, costs had gone up. He mentioned that they had put a project out for public bid earlier this year, but from the year between when they had budgeted for the project to when they actually put it out for bid, the costs for certain things had almost doubled. As a result, they could not afford to do that project at this time and were going to postpone it to a future year.
There were also some regulatory changes that impacted work at the plant. Their Total Maximum Daily Load For phosphorus effluent was going to be officially decreased. In order for them to meet that requirement they were going to need more of a certain chemical which cost about $6,000 per two-week supply. They were also going to need to make some improvements to increase the reliability of that chemical system.
The water treatment side of the plant also had regulatory changes. They started feeding phosphoric acid this year which changed the pH level of the water. They then had to buffer this with sodium hydroxide. They had a system to do this, but it was an old system that had not been used for 10-15 years and it was not right-sized for their current needs. Getting that working properly was going to be another project.
He also noted that with the scheduled maintenance of the digesters there was the possibility that it might become apparent that additional work needed to be done. They hoped and believed that everything was okay with their system, but they had to verify that was the case.
Additionally, shutting the digesters down for maintenance would result in other impacts to their operations. The hauled waste program would not be able to be run. That meant that, not only would they not be bringing revenue in through that program, they would also see the heating costs for their facility increase because they would not be able to use energy from the digesters to heat the building as they usually do. He said that they were trying to schedule the maintenance work during the warm weather months to decrease the impact on their heating bill.
View full meeting details and video here: https://cityofappleton.legistar.com/MeetingDetail.aspx?ID=1204450&GUID=A52FA7A8-98B4-4132-AB7B-D4F0C911B482
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