The Village Utility Commission on Aug. 13 approved a long‑range cash‑flow analysis for the village’s water and sanitary sewer utilities and gave staff direction to advance a water rate study and a second‑phase sewer billing review.

John, identified in the meeting as a consultant, presented a 10‑year financial model showing that the water utility faces capital needs and regulatory constraints that could require a sizable rate adjustment under a worst‑case scenario. John said the analysis "shows that is needing to happen is, a 22 and a half percent increase that could take effect as soon as next year," and that subsequent increases could follow in later years depending on project timing and regulatory review.

Staff emphasized that the village must file with the Public Service Commission (PSC) for non‑inflationary water rate increases and that the PSC evaluates rate cases on a utility basis (including depreciation and a benchmark rate of return). Cameron, identified as a staff member, told commissioners the analysis is intentionally conservative and that projected charges from Madison Metropolitan Sewer District (MMSD) look lower than earlier estimates (from an assumed 8% escalator to about 4.9%). Cameron said the recommendation is to "time the rate case around when those assets are actually gonna get booked into service."

The analysis presented these principal figures and recommendations (worst‑case assumptions noted in the meeting):
- Water capital identified over the 10‑year plan: approximately $17 million in projects, with about $16.5 million assumed debt financed and roughly $1 million cash‑funded for routine work; staff described that figure as approximate and subject to refinement.
- Sewer capital identified: about $6.8 million, split roughly $5.3 million debt and $1.5 million cash.
- Reserve policy target: minimum six months of operating expenses plus one year of debt service coverage.
- Proposed near‑term rate action under the analysis: a worst‑case 22.5% water increase in 2026 (with additional increases shown in later years), and a recommended 5% sewer increase in 2026 (the sewer utility had a 10% increase adopted in 2025).
- Average bill impact example: for a household using 3,250 gallons per month, the worst‑case water increase modeled would raise the water portion by $9.84 monthly (from $43.73 to $53.57).

Commissioners asked staff to seek ways to smooth increases where legally possible. Staff noted the village’s limited flexibility for water because the PSC’s process constrains timing and recoverable costs; sewer has more local flexibility. Commissioners approved the long‑range cash‑flow analysis as presented and directed staff to proceed with a water rate study timed to asset in‑service dates and to move the sewer study into a second phase to revisit fixed vs. variable billing structure.

Staff said they will return with detailed sewer rate recommendations and water and sewer impact fee proposals in the fall.