Grafton to seek 49% water rate increase

The Grafton Village Board on Monday requested that state regulators allow an almost 50% hike to water rates next year.

That increase would result in an average resident’s quarterly water bill jumping from $59 to $91­— a $32, or 48.6%, increase.

The board approved sewer rate increases at the same meeting. Next year and in 2026, sewer rates will increase 6%, and in 2027 and 2028, they will increase 5%.

An average resident’s quarterly sewer bill will increase by about $8 next year, going from $148 to $157.

According to a report by Trilogy Consulting, which recommended the rate increases, the village water utility is in a strong position with little debt and the ability to make payments.

However, it has faced some years of negative cash flow since the last rate increase in 2018 and its debt is expected to grow due to several planned capital improvements.

The Public Service Commission, a state organization that regulates municipal water utilities, recommends a yearly rate of return — basically a percentage of surplus income used for investment in the utility — of 6.2% yearly. The village’s utility only returned a 2.3% rate in 2023.

Trustee Jim Miller, who joined Trustee Andrew Schwartz in voting against the rate hike, said he is hesitant of this way of thinking.

“People will say, ‘I didn’t get a 6% raise at work,’” he said.

Grafton has one of the lowest annual average residential bills of nearby communities, according to the Trilogy report. The current $236 average bill is less than Cedarburg’s $438, Saukville’s $443 and Belgium’s $326 average bills.

The almost 50% places Grafton closer to Cedarburg’s charge and above Jackson’s and Slinger’s.

There are about $21 million in capital improvements planned for the water utility over the next four years, including $10 million in water main, services and hydrant replacements.

Miller said that while the increases may help balance the utility’s budget when calculating for future projects, that doesn’t make it more palatable for residents.

“It’s a tough bullet for people to swallow when they get a $40 increase on their quarterly bill,” he said.

Christy DeMaster of Trilogy noted other communities such as Cedarburg and Jackson have had similar rate hikes recently to fund capital projects.

“While the percentage increase for the water utility sounds high, the dollar impact is relatively minimal for your customers and is being driven by capital improvements the utility needs to do,” she said.

The PSC will determine the final rate increase, which could differ from the village’s request.

The comparatively low increases to sewer rates will help maintain reserve levels and keep on top of capital projects, according to the Trilogy report.

The sewer utility had $4.83 million in reserves with $2.1 million in a restricted equipment replacement fund at the end of 2023 — more than the recommended reserve of $2.8 million. Those reserves are expected to be similar by the end of 2024.

There are about $22 million in projects planned for the sewer utility during the next four years, including $10 million in sewer main replacements and $6.6 million for the treatment plant’s biosolids project.

The Village Board unanimously approved the sewer rates.