Water commission directs design of 76th Street water main, asks council to weigh special assessment or PSC contribution rule

The Board of Water Commissioners voted unanimously to proceed with engineering design for a 76th Street water-main and to notify the Franklin common council about financing options, including the city’s traditional special-assessment process and an alternative set out in the Public Service Commission’s rate tariff.

“I recommend that if the council chooses not to specially assess the project, the Water Utility Commission would like to proceed under the rate tariff policy that we have,” the commission chair said, describing the PSC “water main extension” rule that allows the utility to install mains and record a contribution on benefitted properties for 10 years.

The discussion, which dominated the meeting, centered on whether to press the council for a special assessment that would charge immediate benefitted property owners or instead to build the transmission main into the utility’s rate base and record a contribution that property owners would owe if they connect within 10 years. Staff explained that contributions tied to the PSC tariff are recorded as an encumbrance and expire after 10 years if owners do not hook up.

Some commissioners praised the alternative as a practical tool to address system vulnerabilities. One commissioner said the city must address dead-end mains and system “backbone” deficiencies now to protect water quality and fire protection. Others raised equity and transparency concerns; a commissioner said she had “an ethical issue” with effectively spreading costs across existing ratepayers rather than charging only benefitted property owners.

Staff told commissioners the PSC rate case process would establish how projects are reflected in rates and that concrete per-customer impacts would be set in the utility’s next test year filing. Staff estimated roughly 9,000 customers in the system and emphasized the difficulty of projecting exact cents-per-thousand-gallons impacts until the rate case is prepared.

The commission’s final motion directs staff to inform the common council of the project need, outline the special-assessment process and the PSC contribution alternative, request direction from council on whether to assess or proceed under the tariff, and to inquire with the PSC about potential tariff clarifications or modifications. The motion carried by a recorded vote of 3-0.

Next steps: staff will prepare the design for the 76th Street project, notify council and, depending on council direction and the PSC response, incorporate the project into a pending rate-case schedule or pursue special-assessment action as directed.