Contributing writer

MADISON – Maiden Rock’s residential water rates will more than double during a twostep increase as the village finances a new well, according to an order issuedWednesday, June 2 by the Public Service Commission.

For average residential customers currently paying $27 monthly for 2,000 gallons, they will pay $38.40 for the same amount of water when the village board decides to implement the Step I increase. That amount will rise to $58.20 monthly in Step II, when the new well goes into service next spring or summer, said Shirley Gilles, village clerk.

The two-step increase would raise average residential rates by 114 percent while commercial customers would be subject to as much as a 389 percent increase, according to the PSC rate order.

An individual customer’s percentage increase can vary and actual increases are dependent on usage and customer category, according to the PSC.

No one spoke in opposition to the requested increases at the April 13 public hearing, which didn’t surprise Gilles.

“Because there’s only a handful of users (85), and there’s been no increases since 1993. The community has been well informed on the mandate to put in a well but I expect to hear more comments when people get their bills,” she said.

The village board approved a $690,767 construction well bid earlier this year but Gilles said the total project cost far exceeds $1 million as the village acquired property on County Road S for the well, conducted site testing and tree removal.

Fortunately, the village will receive a state Safe Drinking Water Loan which includes a provision that forgives 74 percent of the project’s cost. However, that still leaves the village on the hook for about $400,000, Gilles said.

Revenue from the Step I increase is projected to pull the utility out of the red by $2,300 and Step II rates should boost annual revenue to $90,818, create a net income of $13,775 and earn the utility a 4.4 percent rate of return on the value of infrastructure investment.

The PSC’ has a 4.9 percent benchmark rate of return but it granted the village’s request for the 4.4 percent rate in order to lessen the impact of the new rates on customers.

The utility’s finances haven’t been robust in recent years and included a $25,378 income deficit in 2018 and finished 2019 with just $2,767 in net income, according to PSC calculations.

A hole 70 feet down in the casing of the village’s only well was deemed unrepairable and the Department of Natural Resources required the village to find a new water source.

The rest of the utility’s infrastructure, dating to 1983, is currently in good shape, said Gilles, although she expects more capital needs to come along eventually due to the system’s age.

“We’re just trying to stay afloat since a simple well can cost a lot of money, it’s a huge undertaking for a utility of this size,” she said.

Like other municipalities, Maiden Rock’s finances are stretched between the high cost of delivering essential services and, due to state law, the inability to raise property taxes accordingly.

About half of the village’s residents are part-timers and contribute little to the water utility’s revenue when they’re absent, and the scaling back operations at a nearby sand mine in recent years also hasn’t helped, Gilles said.

She wished for some relief from the American Rescue Act but targeted for small communities and not necessarily tied to coronavirus expenses which would certainly be welcomed now.