Madison staff outline out-of-city utility surcharges: electric +20%, water and sewer +50%

Mayor Lindsay introduced a review of out-of-city utility rates at the Madison work session, and city staff presented comparative data showing the city’s current surcharges for customers outside the corporate limits.

According to staff, Madison charges out-of-city electric customers an additional 20% above in-city rates and levies a 50% surcharge for out-of-city water and sewer customers. ‘‘In Madison, our electric out of city customers have additional 20% charge beyond what our in city customers are,’’ Jamieson said during the presentation; later, staff clarified the 50% figure applies to both water and sewer.

Staff told the commission they compiled comparable rate information from nearby municipalities but cautioned that differences in city sizes and customer mixes make direct comparisons difficult. Jamieson said some nearby cities (Harrisburg and another listed community) show no extra charges but noted those communities may not have any out-of-city customers.

Scope and customer counts: Mike Plusser, a city staff member, said Madison currently serves 23 nonresidential electric customers located outside city limits and 20 nonresident water customers.

Historical rationale and annexation context: The mayor and other speakers explained the surcharges grew from an effort to encourage annexation and to reflect differences in property valuations. One city official summarized the history: when the bypass was built, a joint agreement left ownership with the county, but the city historically handled some maintenance; the surcharges and annexation policy have served to encourage joining the city for taxation reasons. The transcript also includes an example of a property served through ‘‘Sioux Valley territory’’ that receives city services while remaining outside city limits.

Questions and next steps: Commissioners asked why water and sewer carry a larger surcharge than electric. Staff said the higher percentage on water and sewer reflects that those bills are generally smaller in dollar amount, so the percentage premium appears larger; electric bills tend to be higher and therefore the surcharge is lower in percentage terms (20%). No rate changes were proposed or voted on at the session. Staff said the rate comparisons will inform future rate-setting discussions and any potential policy changes would come back to the commission for formal action.