City of Milwaukee - File #: 090239

• File #: 090239
• Version: 1
• Type: Resolution
• Status: Passed
• File created: 6/16/2009
• In control: PUBLIC WORKS COMMITTEE
• Final action: 7/28/2009
• Title: Substitute resolution relative to a rate increase strategy for Milwaukee Water Works.
• Sponsors: THE CHAIR
• Indexes: WATER SALES, WATER WORKS

Date	Ver.	Action By	Action	Result	Tally
8/5/2009	1	MAYOR	SIGNED
7/28/2009	1	COMMON COUNCIL	ADOPTED	Pass	11:4
7/23/2009	1	PUBLIC WORKS COMMITTEE	RECOMMENDED FOR ADOPTION; Minutes note: Individuals present: Carrie Lewis, Superintendent Water Works Earl Smith, Jr., Business Manager, Water Works Jeff Mantes, Commissioner of Public Works Mark Nicolini, Director, Dept. of Admin., Budget & Management Div. Erick Shambarger, Dept. of Admin., Budget & Management Div.	Pass	4:0
7/21/2009	1	CITY CLERK	DRAFT SUBMITTED
7/10/2009	0	PUBLIC WORKS COMMITTEE	HEARING NOTICES SENT
6/16/2009	0	COMMON COUNCIL	ASSIGNED TO

Number
090239
Version
SUBSTITUTE 1
Reference

Sponsor
The Chair
Title
Substitute resolution relative to a rate increase strategy for Milwaukee Water Works.

Analysis
This resolution grants authority to the proper City officials to apply to the Public Service Commission of Wisconsin for a second step water rate increase to be implemented no earlier than December 15, 2009.

Body
Whereas, Resolution 090142 authorized the proper city officials to apply to the Public Service Commission of Wisconsin for a water rate increase of 3.8% and to return to the Common Council with a strategy for a second step rate increase; and

Whereas, The 3.8% increase will be effective for water sold after September 1, 2009 and will generate an estimated $850,000 in revenue in 2009 and $2.5 million annually thereafter; and

Whereas, Due to decreasing water consumption, increasing costs, and modest rate increase in 2007, the Milwaukee Water Works is not currently operating on a profitable basis, with a rate of return of less than 1% and utilizing $9 million in cash to cover expenses in 2008 and is projected to use an additional $5 million in 2009 to cover expenses and requires approximately a 20% water rate increase simply to close the gap between revenues and expenses; and

Whereas, The initiative to privatize the Milwaukee Water Works has been supplanted by efforts to increase the financial contribution of the Milwaukee Water Works to the city’s general fund while maintaining the existing governance structure of the utility; and

Whereas, An increase in the rate of return to 5.4% would generate sufficient cash for the Water Works to continue to produce high quality drinking water and properly operate and maintain its extensive infrastructure and also contribute a $3 million dividend to the city general fund in 2010; and

Whereas, A multi-year strategy of regular rate increases and cost containment could make a $3 million dividend a sustainable annual payment from the Milwaukee...