PADDOCK LAKE — Water rates will decrease in Paddock Lake, effective April 1, as the result of an increase in users to the system, Village Administrator Tim Popanda said.
The Public Service Commission approved the rate decrease earlier this month. As a result, the water rate will decrease from $12.21 to $9.39 per 1,000 gallons of water used.
Popanda said the average user consumes 4,000 gallons per month. This rate decrease will lower the monthly cost for an average consumer by $11.28, from $48.84 to $37.56. Annually, cost will decrease $135, from $586 to $451 in round numbers.
This decrease was forecast when Paddock Lake undertook the recent $4.9 million Water Supply Improvement Project.
“Back in 2019, the village applied to the Department of Natural Resources and the Public Service Commission to improve our municipal water system,” Popanda said, adding the village was under order by the DNR to correct deficiencies to the infrastructure.
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Popanda said the village applied for a two-part rate change schedule that took into account that new users would connect and help pay for the project and utility operations.
The first step increased water rates from $3.44 per 1,000 gallons to $12.21 for a one-year period.
“We knew that the first rate step would be higher than it had been, ever, and quite possibly the highest (increase) in the region, with the understanding that once these individuals were connected, we would then be able to notify the Public Service Commission and lower our rates,” Popanda said.
He said that initial increase was so drastic because previous rate increases were not sufficient, based on a 3% rate increase model used by the PSC during difficult economic times.
“The previous administrations had not raised the water rates as they should have,” Popanda said. “We were about $7 lower than we should have been per 1,000 gallons of water.”
The April decrease to $9.39 per gallon is step two of the Water Supply Improvement Project. It will bring the quarterly cost (based on 12,000 gallons per quarter) to $112.68. That’s still higher than before, but that rate is more in line with what users in other Kenosha County municipalities pay. For example, a quarterly water bill in Somers is $95.59 for a user who consumes 12,000 gallons of water.
Popanda said the utility will apply for another rate reduction in 2023 or 2024 after more customers connect to the system. It is anticipated the number of total customers will increase by nearly 200 by 2023.
The $4.9 million Water Supply Improvement Project included the replacement of the original 1950s equipment, buildings and storage, the addition of pumps and storage to provide fire protection and an increased quantity of water to existing customers and for future water customers.
The village was under order by the state Department of Natural Resources to correct deficiencies in the system.
The project also extended water along Highway 50 to connect the older system to a newer one on the west side of the village. By connecting the two systems, the utility gained 101 new commercial customers, along with 89 new residential customers, to assist with funding the improvements and system operations.
It was the most cost effective of four options explored, Popanda said. Other options included purchasing water from the City of Kenosha, connecting Paddock Lake’s system with the village of Bristol and improving Paddock Lake’s east-side system without connecting to the west-side system.
Of the total project, $1.8 million is attributed to the construction of the Hwy 50 water main. The remaining $3.1 million is attributed to replacing the existing facility. All users with land abutting the new Highway 50 water main segment will cover the cost of that work through imposed special assessments.
All customers will pay the debt service associated with the improvements and operational costs. These costs are funded with water system user rates.
Popanda said the utility applied for, but was denied, a United States Department of Agriculture (USDA) grant to help offset the project cost, because the village’s household income exceeds federal government income limits for grant assistance. However, the village did qualify for a 40-year USDA Rural Development loan, with an interest rate of 1.875%.
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