Monetized value

The Lake Mills City Council will need to decide the future of the city’s wastewater treatment facility plant without any recommendation from the public works board.

The board had a split vote Jan. 11 on whether to remodel the existing plant or build a new facility. Board members Mark Pickhard, Todd Temperly and John Reich backed remodeling the existing plant while Greg Polacheck, Bennett Ruplinger and Steve Fields preferred building a new facility during official votes.

The board had recommended building a new facility to the city council at the end of 2021 but Input from the Wisconsin Department of Natural Resources along with the council passing the item back to the group resulted in the Lake Mills Public Works Board re-evaluating the options.

Lake Mills Public Works Board recommends building new wastewater treatment facility

Director of Public Works Paul Hermanson said the DNR informed him building a new treatment plant and discharging to the Crawfish River perhaps did not fit entirely with the funding criteria laid out by the DNR.

“The DNR asked if we could go back and monetize some of the intangibles,” he said, noting representatives from Strand Associates have been looking at those items.

Travis Anderson of Strand Associates said the firm had been in communication with the DNR. According to him the DNR typically requires municipalities to use the lowest cost alternative based on a 20-year total worth for projects but indicated the agency will work on a case-by-case approval process for facilities costing 10-20% more than the lowest cost option.

“(The DNR) ultimately have the say in the approval regardless of what option gets selected (by council),” Hermanson said, adding the public hearing regarding the wastewater treatment plant will be key.

Anderson said the non-monetary negative impacts of the options not originally considered in the original evaluation for upgrading the current wastewater treatment facility were primarily the risk of more stringent phosphorous limits, greater costs for construction due to the site previously being a landfill, proximity to existing residences, more difficult to expand in the future, and land acquisition needed for biosolids management. In all these cases, there was the potential for lower and higher costs based on various factors.

“The worst-case scenario of putting additional funds into the existing treatment plant and then constructing a new plant 15, 20 years from now,” he said.

According to Anderson if the non-monetized factors were contributed into the calculations including the need to build a new facility in the future, it would place using the existing plant at a higher overall cost projection than building a new treatment facility.

Fields said remodeling the existing plant would allow for the phased approach to save some money but building a new facility would reduce the risk of needing to build a new treatment plant in the future.

“With option two, I’m going to roll the dice and risk having to build a new one 10 years down the road,” he said. “That’s really what we’re here to weigh out – what are we willing to spend and what risks are we willing to take. And that’s what it really comes down to in my mind. There’s no perfect solution.”

Reich pointed out no matter what option is selected customers will be seeing an increase in their wastewater bill. Based on the report of Strand, Reich said the customer rate would at least double even if the existing plant with modifications will be used.

“All of a sudden telling your sewer customers their rate doubles; where does that happen with any other utilities,” the board member said. “I think it’s just shocking no matter what we do.”

Assistant Director of Public Works Duane Vandermause said Reich is correct, but the city is being required to make the changes at the wastewater treatment facility to align with the new federal environmental protection agency standards, increase capacity and replace aging infrastructure.

Furthermore, if the city chooses to use the existing plant, phased rate increases would be possible because the remodel could be done through a phased approach.

There was the question if raising the rates before the construction or remodeling occurred to help offset the cost was possible. Hermanson said he would research if this would be possible.

Vandermause said the city would also look for funding options such as grants to decrease the burden on residents.

Electric rates expected to increase

During his report to the board, Hermanson said he was informed by WPPI, which supplies electricity to Lake Mills, that it is anticipating costs to be 3-5% higher budgeted during the first quarter of 2022. One of the factors in the increase is the cost of natural gas; the other is transmission line congestion.

“What that simply means is there’s more power flowing through the grid and more of it’s going to very specific areas like larger cities, so it causes congestion and when that happens – just like the law of supply and demand – the cost of energy goes up,” Hermanson said.

The public works director said investor-owned utilities are telling customers to expect a 10-15% price increase for the first half of 2022.

Hermanson believes because WPPI has a diverse energy-source portfolio, and the city pays into the rate stabilization fund to help underwrite the wholesale cost customers should be protected from any large spikes in prices.

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