Top suburban officials are imploring the state to deny Milwaukee's request for a 36% boost in water rates, saying it would be unfair to force the suburbs to subsidize the city's budget.
But Milwaukee is standing firm, telling the suburbs, in effect: How we spend the money is none of your business.
"The issue here is the appropriateness of the rate," Ald. Bob Bauman said Monday. "How the money is used is irrelevant."
Milwaukee is proposing rate increases of 28.5% for city residents and other retail customers and 36% for the 10 suburban communities with their own water utilities that buy Lake Michigan water wholesale.
On Friday, the Public Service Commission received a letter from the mayors and village presidents of the 10 communities: Wauwatosa, West Allis, New Berlin, Mequon, Brown Deer, Greendale, Shorewood, Thiensville, Butler and Menomonee Falls.
"The dramatic increase proposed by the Milwaukee Water Works, for the purpose of bolstering the general fund of the City of Milwaukee, would be an unjust and unreasonable burden on the ratepayers in our communities, who would see no benefit from the increase or from such general fund contributions," the letter says.
A letter from Greenfield, one of the communities facing a 28.5% increase, makes the same objections.
The proposed rate increase would generate more than enough money to run and cover capital costs of Milwaukee's water utility. It would also generate an estimated $3 million for the general fund, which primarily is funded by property taxes and can be spent on a wide variety of items.
The request is reasonable, Water Works Superintendent Carrie Lewis said, because it would put the utility's "rate of return" - or profit - at only 5.4%, well under the state's benchmark of 7.5%.
"It's supposed to generate a profit, and there's no legal prohibition to our earning a profit from that activity," Bauman said.
The prospect of a city-suburban fight over water rates was signaled last month when the suburbs said they would hire an expert to evaluate whether the proposed hike is justified.
Jim Wojcehowicz, Wauwatosa's water utility superintendent, said Monday that the suburbs have not yet decided on whether to hire a consultant, but would meet again Thursday.
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