Willmar Municipal Utilities
for 2024 is proposing higher than planned water rate increases, as well as an electric rate increase.
A public hearing will take place Monday, Nov. 6, during the Willmar City Council meeting regarding the ordinance amendments for increasing the water and electric rates.
The Willmar Municipal Utilities budget calls for a 5% increase in electric rates, which have not been increased since 2015, according to Commissioner Carol Laumer. "So that's been really good — that's a minimal amount, really," she said.
The water rate ordinance currently has scheduled increases of 5% in 2024, 4% in 2025 and 3% in 2026. However, to finance the replacement of water mains for Willmar street improvement projects, water rates are now proposed to increase 20% in 2024, 4% in 2025 and 3% in 2026, according to General Manager John Harren.
The average customer using about 600 cubic feet of water per month will see an increase of about $7 on their water bill, according to Harren.
When the current ordinance was approved by the Willmar City Council in 2022, Willmar Municipal Utilities was basing the rate increases on having to finance approximately $1.25 million in water main replacements throughout the 10-year Willmar street improvement plan, according Harren.
The plan adopted by the Willmar City Council has an average of $1.5 million in annual water main replacement projects, leaving an approximately $250,000 to $300,000 shortfall each year to fund the Willmar Municipal Utilities portion of the projects, according to Harren.
The total projected revenues for 2024 are approximately $41.5 million, with total operating expenses of approximately $34.2 million, according to Finance and Office Services supervisor Andrea Prekker. The largest operating expense is approximately $17.6 million in purchased power.
The budget includes the payment of the principal and interest on a $10 million bond for the northeast water treatment plant, which will be placed in January 2024.
It also includes a $2.2 million payment to the city of Willmar for capital improvement projects and an anticipated 6% increase in health insurance costs.
There is $11.5 million included in the budget for capital projects, which include $4.5 million of the construction costs for the northeast water treatment plant — an estimated $20 million project, $1.9 million for the purchase of diesel generators to increase the capacity to generate electricity — an estimated $15 million project, $1.5 million for water main replacement, $1.5 million for line department construction, and $1.2 million to help fund the construction of new facilities, according to Prekker.
The projected 2024 year-end cash balances are expected to be $31.5 million in the electric fund and $3.7 million in the water fund, which includes the $10 million in bond funding. The total 2024 year-end cash balance for Willmar Municipal Utilities is projected to be $35.2 million.
The Municipal Utilities Commission approved the 2024 budget on Sept. 11 and on Oct. 9, following a public hearing, approved recommending the water and electric rate increases to the
Willmar City Council.