Sewer Rates Face Rapid Rise Starting in 2013
After decades of deferred maintenance on sanitary and storm sewer systems, rebuilding to meet current needs will cost resident ratepayers significantly more each year for the next five years and probably beyond.
It is time to pay the piper.
The sewer piper, that is.
After decades of low spending, both sanitary and storm sewer rates will increase considerably next year and would continue to rise over the four years thereafter, under a recommendation passed unanimously Tuesday night by the Budget and Finance Committee.
The sewer rate increase will go to the full Common Council next Tuesday for consideration.
If the measure passes, in 2013, the city's "local charge" for sanitary sewer service will rise by 20 percent, according to City Finance Director John Ruggini's recommendation — "The impact of the capital improvement budget on rates," Ruggini said.
But because the resident ratepayer's sanitary sewer bill is split about 50 percent between the city's "local charges" and charges levied by the Milwaukee Metropolitan Sewerage District — expected to rise by only about 3 percent next year — the actual difference in an average residential sanitary sewer bill will amount to about 12 percent.
In real dollars, that means the quarterly sanitary sewer bill for the average homeowner would increase from $77.69 this year to $85.85 next year, and annually, the increase would be from $310.76 to $343.40, a $32.64 rise.
That would be the largest impending annual increase to fund the current capital improvement plan, but additional yearly increases over coming years would make that same homeowner's quarterly bill for sanitary sewers $114.42 in 2017, or $457.68 for the full year.
|Projected Sanitary Sewer Rate Increases|
|Projected Bill Increase||12%||8%||8%||7%||7%|
|Quarterly Residential Bill Est.||$85.85||$92.95||$100.08||$107.23||$114.42|
The same trend holds for storm sewer bills, which are not subject to additional charges from MMSD and would rise 21 percent next year, 18 percent the year after, another 12 percent in 2015 before settling down to 5 percent increases in 2016 and 2017.
The average residential ratepayer would see an increase in the quarterly bill from $13.86 to $16.82, or an annual increase from $55.44 in 2012 to $67.28 in 2013, a rise of $11.84.
By 2017, the quarterly bill would be $24.52 and over the year would total $98.08.
Projected Storm Sewer Rate Increases
|Quarterly Residential Bill Est.||$16.82||$19.78||$22.15||$23.34||$24.52|
It doesn't stop there. Wauwatosa's water rates, part of the same bill, are expected to be raised by the Public Service Commission from $79.24 quarterly (on the average home) to $88.29 next year and in 2014, to $90.94 in 2015 and '16, and to $93.07 in 2017.
Taken all together, water, sanitary sewers and storm sewer rates are projected to rise from $169.79 per quarter this year ($679.16 for the year) to $190.96 per quarter next year ($763.84 for the year). By 2017, according to Ruggini's forecast, the quarterly bill would be $232.61 — or $930.44 for the year as a whole.
As if that weren't enough, Ruggini's figures do not include the needed costs of the coming East Tosa Sewer Project, which is still in the design phase, having been pushed back by cost overruns in the Meinecke Avenue Sewer Project.
Taking East Tosa into account, sanitary and storm sewer rates, and likely water rates as well, will likely continue to rise over the next 10 to 20 years, by Ruggini's projections.
No numbers have been attached to that long-term increase. The East Tosa Project has been forecast to cost anywhere between $30 million and $80 million, depending on the extent of infrastructure improvements and who will pay what.
Old sewers, meet new storm intensities
Why such large increases, now and for so long?
"A lot of this is deferred maintenance," Ruggini said, "keeping our costs down over many years. People have been enjoying lower rates for a long time. The age of our infrastructure is older than the average."
Ruggini presented numbers showing that even after the projected rate increases take effect, Wauwatosa will still have water and sewer rates lower than the average for cities in its class.
"Tosa residents will still be paying less than the average for Wisconsin cities of 10,000 to 60,000, and less than the average for all municipalities in Milwaukee County," Ruggini said.
The red flag was raised in 2008, Ruggini said, when unusually heavy rains produced widespread basement flooding — and not just of "clear" stormwater but backups of sewage into homes.
As the city began studying the problem, more heavy storms produced a repeat of floods in 2009. In 2010, deluges a month apart, culminating in the monster rain of July 22, flooded many of the same homes twice, and in all cases there was a large proportion of sanitary sewage backup in the mix.
Rates catching up with debt
By 2011, the city had determined that aged sewers in swaths of Wauwatosa built between the World Wars were not only failing through neglect but simply inadequately sized to handle the volumes of water all these storms were bringing.
On top of the heartbreak for the flooded homeowners, Wauwatosa was falling rapidly out of compliance with the standards of MMSD and the Department of Natural Resources.
Borrowing to pay for projects along Ruby Avenue, Wisconsin Avenue, in Ravenswood and of course the approximately $15 million Meinecke Project, to name only some, have increased the city's debt and debt service to levels that exceed the comfort zone of city administrators.
Sewer utilities are intended to be paid for through user rates as opposed to property taxes — which are now effectively frozen anyway — leaving the city no choice but to impose what are essentially catchup rates to pay off its capital borrowing.
"It should be noted, too," Ruggini said, "that we are not just replacing 54-inch sewer lines with new 54-inch lines. We're replacing them with 108-inch sewer lines. These are significant enhancements as well as repairs to the system."
Regardless of the reasons, ratepayers may not appreciate the added costs, but to put it in some perspective, Ruggini offered one last set of numbers.
For the critical services of providing water and sewers — without which residential life would be unlivable — the average Wauwatosa resident pays less per month than for their telephone service, gasoline, electricity, natural gas ... and even their cable TV.