By Sterling McGinn
Water rates — a hot topic in Newberry — were under lengthy discussion at last week’s Newberry Village Council meeting. Changes in the water rates should be expected.
The meeting was held Tuesday, February 16 at 6 p.m. via Zoom. All council members were in attendance with the exception of trustee Dan Hardenbrook. This was also the first meeting for newly appointed trustee Darrell Schummer.
A possible increase in village water rates is needed in order to set aside funds for the water infrastructure. The needed improvements include: a water main project, water tank installation & repair, and, namely, the state-mandated lead service line replacement. The service line project has to be completed within the next 20 years.
Rural Water recently completed a draft of a rate study, which will be a guide and a suggestion for where the village needs to be regarding water rates.
In 2017, water rates were changed to a very unpopular flat rate system in order to prevent the water fund from going bankrupt.
“We are able to pay the bills, but that’s about it,” stated village manager Allison Watkins. “We are not putting money away for a bond reserve like we need to be, and we are not able to put money away for capital planning for improvements.”
A water study was completed in 2018, which suggested an almost $3 increase in rates on top of what was already increased the previous year. The village didn’t implement the recommended increase because of the recent adjustment to a flat rate system. The 2018 study was not revisited.
The newest study will have a flat rate suggestion but will also supply a suggested rate for an alternative method of charging per 1,000 gallons used, which is how the village billed prior to 2017. “Something we need to keep in mind, we are over eight million dollars in debt—just loan debt,” stated Watkins. “Currently out of the $75 dollars [flat rate], $31 goes toward loan payments.”
Watkins also informed the council that it would be in the village’s best interest to consider returning to the 1000-gallon usage base rate system. Residences which have the smallest size meter have a lower base rate. The rates increase the larger the meter.
After the new study is finalized, the village attorney will review the language. The council and Water and Light Board will review the findings, and a public hearing will take place.
In another matter, Allison Watkins updated the council on utility bill carry-over. The unwritten practice allows individuals to carry-over an overdue balance from one month to another. Watkins said that due to concerns from customers, the practice will not be phased out at this time. “We were not in any way trying to make it harder for people to pay their bills…we don’t want to shut people off—we haven’t shut anyone off in the last two months.” The phasing out process has been put on hold.
In other news, the Village is still waiting to have a crew from Fairbanks Corporation evaluate the generator’s engine block after a breakdown last July. While generating for Consumers Energy, a connecting rod busted out of the crankshaft casing. It is unsure if the engine block was damaged from that occurrence. The estimated quote for the evaluation is $45,000 to $50,000, and will likely be covered by insurance.
“They are a specialized crew,” stated Allison Watkins. “We are on the waiting list—they fly all over the world fixing these generators.”
After the evaluation takes place, the board will determine whether or not keeping the generator is necessary, as it could be an expense lifted from the village. “We do not have to have the generator,” explained Watkins. “It is not part of our contract with Consumers, and it does not impact the rate that we get from them.”
On occasion, the village will generate power for Consumers Energy. If the village were to generate their own power, it would cost 20 cents a kilowatt-hour, which is significantly higher than what is purchased from Consumers Energy. No action was taken on the matter.
Finally, the board approved the payment of the Village bills totaling $47,556.38 and the Water and Light bills totaling $106,635.98.