With 45% water rate hike looming, Port mayor pushes back

Port Washington Mayor Ted Neitzke on Tuesday expressed frustration with the Department of Natural Resources’ decision to require changes to the city’s water plant that will cost an estimated $15.3 million and require a projected 45% water rate increase in 2024.

“I’m bothered,” Neitzke said after the Common Council meeting where the project plan was presented. “I’m frustrated, and I think everyone here is as well.”

It’s especially frustrating, he said, because even though the water plant doesn’t meet current codes, it has been operating without issues.

“When you’ve been grandfathered for decades ... how are we going to face taxpayers and tell them there’s 45% increase. That’s horrible,” Neitzke said. “We can’t price out the people who have been living here for years.”

Neitzke said he would speak to area legislators this week to see what, if anything, they could do to help the city since they adopted the rules that the Port plant now has to follow.

The water project is due, in large part, to meet current state codes and address deficiencies, primarily regarding backup power and needed changes to the clearwell, that have been identified by the DNR.

The DNR had grandfathered the city’s water plant on these issues in the past, but recently decided to end this practice and require plants like Port’s to update their facilities, officials said.

“There’s no way around it,” Tom Nennig, president of City Water, a consultant for the project, told the Common Council.

Two-thirds of the estimated $15.3 million pricetag is to bring the plant into compliance with the DNR’s current regulations, Public Works Director Rob Vanden Noven said, while the remaining one-third of the cost can be attributed to plant upgrades, such as improvements to the windows, restrooms, laboratory, Scada computer control system and heating system.

The project will include constructing an addition to the south side of the water plant to house a generator and other needed improvements, adding an ultraviolet disinfection system and improving the overall electrical system.

The project is expected to extend the life of the plant by 25 to 30 years, Miles Jensen of Short Elliott Hendrickson Inc., another consulting firm involved in the project, said.

Several aldermen asked about alternative ways to finance the improvements.

“Do we believe with the (federal) infrastructure bill that’s out there, there will be anything we can tap into?” Ald. Dan Benning asked.

Vanden Noven said, “We’ll be looking at that closely should it come  to fruition.”

“Obviously, we’d qualify for a lot of that,” Nennig said.

He also cited two state programs that provide low-interest loans for water projects, noting there is a possibility that a portion of the loan could be forgiven.

Stressing the numbers are only an early estimate, Nennig noted that the city could mitigate the potential impact by implementing a 3% rate increase next year or asking the Public Service Commission to reduce the rate of return from 5% to the current 3.6%, at least initially. That would bring the 2024 increase to 30%, he said, although the PSC would then expect the city to impose annual 3% increases until it reaches the 5% rate of return.

But Neitzke took issue with the proposed rate increase and DNR requirements, saying, “I don’t know how any of us could stomach a 45% rate increase. This is overreaching.”

Port isn’t the only community dealing with this situation, Nennig said, noting the DNR is also cracking down on other plants that have been grandfathered in the past.

Aldermen approved a contract with City Water and SEH to do the design and engineering work for the improvement project at a cost not to exceed $914,000.

That, Vanden Noven said, should keep the city moving ahead to the point where the DNR will agree to give Port until 2024 to complete the work. The agency had ordered the improvements made by the end of this year.