Dorchester board approves 36 percent water rate increase

The Dorchester Village Board learned and deliberated for over an hour about a water rate increase that will hit Dorchester residents by or before 2023.

A topic that dominated the discourse of the Dorchester Board meeting ultimately will lead to a 36 percent increase in water bills for residents of the village.

Currently, the village charges $54 plus $7.50 per 1000 gallons used for water and $31.86 plus $11.28 per 1000 gallons for sewer. This comes after the sewer rates were increased by 10 percent in 2021.

Brian Reilly and Kristina Norquist of Ehlers Public Finance Advisors gave the board two options for structured raises in water rates.

Option no. 1 used a higher base fee of $60 per quarter for residential users and raised the water rate from $11.28 to $13.76 per 1,000 gallons used. For an average consumer who used 6,000 gallons of water, the increase would add $43.03 to the resident’s quarterly water bill. Option two required a $43.33 base payment per quarter and an additional $15.34 per 1,000 gallons used. In a similar scenario, the average resident would pay $135.37 for 6,000 gallons used in a quarter which is an estimated increase of $35.83 per quarterly billing cycle.

The second option would require a 36 percent increase from the lowest volume user to the highest volume user. The first option however distributes that 36 percent differently. For a low volume user (2,000 gallons used), the customer would see a 60.83 percent increase in their quarterly bill. In contrast, a higher volume user (12,000 gallons used) would experience a 34.64 percent increase while a commercial user (one-inch meter with 37,000 gallons used) would experience a 33.97 percent increase in their bill. Finally, an industrial user (two-inch meter and 108,000 gallons used) would see a 40.68 percent increase in their quarterly bill.

Reilly said both options generate the same amount of revenue but the difference is in how the costs are spread throughout the community and the stability of the income for the village.

“They generate the same amount of revenue. It’s just how they are spread across the user base,” Reilly said.

Trustee Keith Lageman said the first option would be the more fiscally responsible option.

“It’s going to save us if people decide well, ‘We’re not going to use any water now.’ Then we still get the money we need to pay our loan,” Lageman said.

Norquist said the rise in rates helps the city deal with inflation-related increases in cost. She said prices of chemicals have skyrocketed from 2021 - 2022 which has added to the city’s expenses. Norquist also said they have factored in the fact that the cost of these chemicals could go back down in ensuing years.

Historically, the Dorchester water and sewer departments’ expenses have exceeded revenues according to Norquist.

Reilly explained that the first option provides more concrete income for the water department as opposed to option two, which carries more income risk.

Reilly said the rate increase was needed to prove to the state that the water and sewer departments can bring in enough revenue to handle the village’s safe drinking water loan.

Reilly noted that as with any water rate increase, residents tend to use less water and that could create lower revenues than expected when basing the rates off of a largely increment-based system.

The board deliberated on which option they would want to go with. Two board members, Clem Klimpke and Daniella Schauer, preferred option two which would save money for people who might not use as much water while board president Kurt Schwoch, Eric Klemetson, Julie Goldschmidt and Keith Lageman voiced their support for option no. 1.

Schwoch argued that increasing the flat rate would help ensure that infrastructure was taken care of in the future and would be a more stable income.

“We’ve got fixed costs and I think [option 1] addresses it the best,” Schwoch said.

I think I speak for everyone when I say, none of us are happy we have to increase this but I also believe that if it would have been increased over the last 20 or 30 years annually, we wouldn’t be in this position right now,” Lageman said. “So now we’re playing catch-up.”

Klimpke and Schauer did not want to place more cost on Dorchester residents but Schauer noted that if things had been done different in the past, they might not be in this position. The board ultimately voted to go with the first option and will institute the increase either in October 2022 or January 2023.

The plan laid out by Ehlers would also require two percent increases from 2024 through 2026.

Scot Balsavich from Cooper Engineering updated the board on the progress made by Steen Construction on the street and utility project at Third and Front Streets.

Instead of using a detour method when working on County Hwy. A, the construction team will use a flagger to allow people to drive around the construction. Balsavich estimated that towards the later part of July, concrete workers will begin pouring curb and gutter systems as well as sidewalks on South Third Street.

Steen Construction will be sending people along the affected routes an update as they progress according to Balsavich.

Board member Daniella Schauer said residents were told that the street would be open after days in which work had been done but she said it doesn’t seem like the streets have been opened thus far.

“We were told that at the end of the day that the street would be able to be accessed by the people living on it or emergency vehicles,” Schauer said. “By the looks of it right now, that’s not happening. I don’t think we could get an ambulance or fire truck down that street.”

Eric Klemetson said he’s worked on road construction projects before and it a fine balance between going quickly and making the road suitable for public use.

“It’s a battle out there and they’re trying to go as fast as they can but it’s a battle,” Klemetson said.

_ The night started off with a public comment section in which board member Daniella Schauer had a complaint as a citizen for the board. She stated that her water was shut off during the construction project and it was not supposed to be. She also said after it was shut off, that she has had to run over 40 gallons worth of water through her faucets to get the orange tinge out of the water.

“To this day, there is still a brown tinge to it,” Schauer said. “When it first came out, it was like mud.”

She said that her water should have never been shut off. Public works employee Rick Golz said the brown water would have happened no matter what due to the road and utility construction taking place near her home. He said a pipe had burst during the construction and the city and construction team did what they could to limit the affected houses.

Balsavich said a valve was not tied back to the main water line during a past construction project and when they pulled dirt away from the valve, a joint had broken open and caused a disruption.

“The crew did what they could to flush out as much as they could,” Balsavich said. “Things like that do happen during construction. I’m not saying it should happen, but it does happen.”

Schauer then asked who was going to pay for the water she had to run in order to get clean water back into her house.

“I mean I feel I shouldn’t have to foot the bill,” Schauer said.

The board decided that they would have Schauer and any other person who feels as if their water was wrongly shut off and muddied, write a letter to the board asking for a credit on their water bill. They could then discuss options for a credit on residents’ water bills at the next village board meeting.

_ The water and sewer department is awaiting parts and for a software update. The department is also assisting with utility duties related to the street construction project.

_ The Joint Review Board will have a meeting later in July to give an update on TIF districts. Primary elections will be held Aug. 9.

_ Golz said well no. 2 had an electrical issue and it brought up concerns that more might be wrong in the electrical area of the well.

Golz said the village had already planned on replacing it but there is more wrong than was originally budgeted for so he is asking the board to set aside an additional $18,635 from the future expenditures account to redo the whole panel. The board decided it would be better to do the upgrades since they have the money instead of potentially having to deal with the issue down the road.

_ The board voted to use money that was put aside by the DNR in the amount of $9,218.88 to jet the sanitary sewers. The expense was a budgeted item.

_ The board tabled a discussion to appoint Kelly Gunderson to take care of dog complaints within the village.