Utility Advisory Committee — Agenda Packet

MEETING: REGULAR MEETING OF THE UTILITY ADVISORY COMMITTEE DATE & TIME: Tuesday, October 6, 2026 at 6:00 PM LOCATION: Germantown Village Hall Board Room N112 W17001 Mequon Road Any member of the body and/or citizen may attend the meeting virtually through the WebEx platform, Meeting #: 2553 428 1762 Password: WnPjMDmb353 which can be accessed by phone at 408-418-9388 or by logging on at https://villageofgermantown.my.webex.com/villageofgermantown.my/j.php?MTID=m0ed6a21468fdcfb18610282e83bdbb91 Citizens not wishing to attend the meeting personally or virtually may submit any public comments by filling out the Online Comment Form by 4:00 PM on the day of the meeting so that it can be provided to the members of the body for their consideration. Previously recorded Board, Committee, and Commission meeting videos can be viewed at https://www.youtube.com/@villageofgermantownwi AGENDA I. CALL TO ORDER: This meeting has been given public notice in accordance with Section 19.83 and 19.84, Wis. Stats, in such form that will apprise the general public and news media of subject matter that is intended for consideration and action. II. ROLL CALL: III. MEETING MINUTES: A. January 29, 2026, Meeting Minutes (ACTION) IV. CITIZEN INPUT: (Please be advised per 19.84(2) that information and comment will be received from the public. It is the policy of this municipality that public input be limited to a four (4) minute period per person with a time extension granted at the discretion of the Chairperson. Be advised that there may be limited discussion of the information received but no action will be taken under public comments.) Comments that may be injurious to village personnel or other individuals will not be allowed. V. UNFINISHED BUSINESS: VI. NEW BUSINESS: A. Consideration of a Water Rate Increase (ACTION) B. Consideration of a Sewer Rate Increase (ACTION) VII. ADJOURNMENT: UPON REASONABLE NOTICE, efforts will be made to accommodate the needs of disabled individuals through appropriate aids and services. For additional information or to request this service, please contact the Village Clerk at (262) 250-4745 at least 2 days prior to the meeting. Notice is hereby given that a possible quorum of other boards, committees, and/or commissions may attend this Page 1 of 15 UTILITY ADVISORY COMMITTEE AGENDA October 6, 2026 Page 2 meeting to gather information about an item over which they have decision-making responsibility. This may constitute a meeting of these bodies per State ex rel. Badke v Greendale Village Board, even though these bodies will not take formal action at this meeting. Page 2 of 15 MEETING: REGULAR MEETING OF THE UTILITY ADVISORY COMMITTEE DATE & TIME: Wednesday, January 28, 202 6 at 5:00 PM LOCATION: Germantown Village Hall Board Room N112 W17001 Mequon Road MINUTES I. CALL TO ORDER: This meeting has been given public notice in accordance with Section 19.83 and 19.84, Wis. Stats, in such form that will apprise the general public and news media of subject matter that is intended for consideration and action. Chai rperson Trustee Warren called the Utility Advisory Committee meeting to order at 5:01 PM. II. ROLL CALL: Present: Trustee Robert Warren, Member Steve Wesolowski, Member Scott Hefle, Member Peter Nilles, Member James Hansen Also Present: Village Administrator Steve Kreklow, Finance Director Matthew Uselding, DPW Director Matthew Mortwedt, Wastewater Superintendent Tim Zimmerman, Water Superintendent Paul Haugen, Deputy Clerk Maddy Laufenberg III. CITIZEN INPUT: (Please be advised per 19.84(2) that information and comment will be received from the public. It is the policy of this municipality that public input be limited to a four (4) minute period per person with a time extension granted at the discretion of the Chairperson. Be advised that there may be limited discussion of the information received but no action will be taken under public comments.) Comments that may be injurious to village personnel or other individuals will not be allowed. Melanie Smythe (N140W17938 Cedar Ln) spoke regarding New Business Item E (Water Supply Service Area Plan Review), 5-year projections, and requested that Baird review the recent utility (water and sewer) rate studies. IV. MEETING MINUTES: A. July 30, 2025, Meeting Minutes (ACTION) Motion: Approve as presented DRAFT Page 3 of 15 Page 2 Motioned By: Peter Nilles Seconded By: James Hansen Yes: Robert Warren, Steve Wesolowski, Peter Nilles, James Hansen No: None Abstain: Scott Hefle Motion Carried by Voice Vote (Yes 4, No 0, Abstained 1) V. UNFINISHED BUSINESS: VI. NEW BUSINESS: Motion: Discuss New Business Item F First Motioned By: Robert Warren Seconded By: Scott Hefle Yes: Robert Warren, Steve Wesolowski, Scott Hefle, Peter Nilles, James Hansen No: None Abstain: None Motion Carried by Vocie Vote (Yes 5, No 0, Abstained 0) F. Requirements for the installation of deduct meters (DISCUSSION) DPW Director Mortwedt, Finance Director Uselding, and Water Superintendent Haugen discussed the regulations surrounding the requirement that certified plumbers install deduct meters for water utility customers. A. Water Utility Cash Flow & Rate Discussion (DISCUSSION) Finance Director Uselding and Village Administrator Kreklow discussed the 2025 water utility cash flow and rates, and provided a comparison of Germantown water. B. Sewer Utility Cash Flow & Rate Discussion (DISCUSSION) Finance Director Uselding discussed the 2025 sewer utility cash flow and rates. C. Report on Old Farm and Main Street Lift Station upgrades. (DISCUSSION) DPW Director Mortwedt and Wastewater Superintendent Zimmerman discussed the planned upgrades to the Old Farm and Main Street lift stations. D. Wastewater Utility Lift Station 6 Land Acquisition (ACTION) Motion: Make a positive recommendation of the land acquisition for Lift Station 6 to DRAFT Page 4 of 15 Page 3 the Public Works & Highways Committee Motioned By: Peter Nilles Seconded By: Robert Warren Yes: Robert Warren, Peter Nilles, James Hansen No: Steve Wesolowski, Scott Hefle Abstain: None Motion Carried by Voice Vote (Yes 3, No 2, Abstained 0) E. Water Supply Service Area Plan (WSSAP) Review (ACTION) Motion: Make a positive recommendation of the WSSAP to the Public Works & Highways Committee Motioned By: Peter Nilles Seconded By: Scott Hefle Yes: Robert Warren, Steve Wesolowski, Peter Nilles, James Hansen, Scott Hefle No: None Abstain: None Motion Carried by Voice Vote (Yes 5, No 0, Abstained 0) VII. ADJOURNMENT: Chairperson Trustee Warren adjourned the Utility Advisory Committee meeting at 6:59 PM. DRAFT Page 5 of 15 BUSINESS OF THE UTILITY ADVISORY COMMITTEE MEETING DATE: October 6, 2026 PLACEMENT: Action Item ITEM TITLE: Consideration of a Water Rate Increase (ACTION) SUBMITTED BY: Lisa Davis, Finance Director SUMMARY EXPLANATION: The Water Utility’s last rate case allowed for an annual simplified rate increase up to 3% each of the next three years, Cash flow in the utility is still poor with only 30-day cash on hand. Recommendation is a full quarter of operating expenses as cash on hand. Requested rate increase would go into effect Q1 of 2027. This item went before the Public Works & Highways Committee on September 2, 2026; a motion was made and passed to forward this item to the Utility Advisory Committee for input and approval. ATTACHMENT: 1. SRC_Germantown Water Utility (2210) 2. DPW rate increase graph 3. Dept of Public Works Rate increase request for 2027-revised STAFF RECOMMENDATION: The Public Works & Highways Committee requests the UAC provide approval of a 3% simplified rate increase to go into effect Q1 of 2027. ACTION BY COMMITTEE: Page 6 of 15 Simplified Rate Case Application - Water Class AB 2210 - Germantown Water Utility Public Service Commission of Wisconsin PO Box 7854 Madison WI 53707-7854 (filing this form out is in accordance with Wis.Stat196.193) 3011(1/1/2020) Preparer Name: Lisa Davis Date Application will be filed with the PSC: 10/20/2026 Notice Rate Effective Date: Newspaper Name: Date to be Mailed/Published: 09/30/2026 Not Applicable 01/01/2027 Annual Report Information Page 1 Total Sales of Water W-1 $3,496,596 2 Rate Increase Factor 3.0% 3 Line 1 * Line 2 $104,898 4 Net Operating Income (Operating Revenues - Operating Expenses) W-1 -$1,114,303 5 Adjusted Total Operating Income (Line 3 + Line 4) -$1,009,405 6 Average Net Rate Base - Water Utility F-23 $24,106,21 7 7 Line 5 / Line 6 -4.2% 8 Test 1 - Financial Eligibility Qualifies * Yes 9 Adjusted Operating Income (Line 5) 10 Total Operation & Maintenance (O&M) expense (600 and 900 accounts only) 11 Line 9 / Line 10 12 Test 2 - Financial Eligibility Qualifies ** ** Eligible if line 11 <= 6.0% * Eligible if line 7 <= 6.40% History Check Effective Date of the Last Full Rate Case: 12/15/2024 Rates from last full rate case have been in effect for at least one full calendar year and the current annual report has been filed. Yes If Class AB, it has been 5 years or less since the last full rate case. Yes Effective Date of the Last SRC: 12/15/2014 Rates from the last SRC have been in effect for one year (12 months). Yes Water Meter Rates 5/8" meter rate at the last full rate case: 21.00 Current 5/8" meter rate: 21.00 If Class C or D, current rate is less than 40% higher than the last full rate case. NA 5/8" meter rate percent increase since last full rate case: 0.00 % Preparer Phone Number: Preparer Email Address: 262 250-4777 ldavis@germantownwi.gov Note : this application is not officially submitted until it is uploaded to the Commission ’ s Electronic Records Filing System. Customer Notice Method: Mailed to Customer Date Printed: 7/31/2026 3:21:26 PM Page 7 of 15 Notice of Rate Increase Water Customers of the Germantown Water Utility This is to give you notice that the Germantown Water Utility will file an application on October 20, 2026, with the Public Service Commission of Wisconsin (PSC), for authority to increase water rates. Rates for general service will increase 3.0 percent. The increase is necessary to reduce the existing deficiency in present rates. The request is being made under Wis. Stat. 196.193. Rate increases granted under this statute do not require a public hearing. The effect of the increase for some selected customers is shown below. Public Fire Protection and Wholesale rates (if applicable) will also increase 3.0 percent. Germantown Water Utility anticipates that this rate increase will go into effect on January 1, 2027. If you have any questions about the rate increase request, call the Germantown Water Utility at (262) 250-4703. Customer Classification Meter Size Gallons Existing Quarterly Rate Revised Quarterly Rate Average Residential 3/4 12,000 $73.20 $75.39 Large Residential 3/4 18,500 $101.48 $104.51 Multifamily 2 91,500 $485.03 $499.53 Commercial 1 58,000 $285.30 $293.83 Industrial 4 860,000 $3,633.20 $3,743.97 Date Printed: 7/31/2026 3:21:26 PM Page 8 of 15 Germantown Water Utility Operating Results Current Year Prior Year Actual Rate of Return -4.62% -2.01% Authorized Rate of Return 4.90% 4.90% Unrestricted Reserves 2021 2022 2023 2024 2025 Year end balance 1,354,527$ 4,883,131 $ 6,902,013 $ 908,594 $ 181,194 $ Months on hand 7.52 6.47 16.41 22.32 0.62 Debt Coverage 2021 2022 2023 2024 2025 Actual 4.53 4.08 5.50 2.40 1.29 Required 1.25 1.25 1.25 1.25 1.25 Investment in Capital 2,511,329 3,569,948 3,710,495 $3,318,381 $3,533,618 $2,934,289 $2,747,337 $3,231,065 $3,721,787 $4,404,397 $- $500,000 $1,000,000 $1,500,000 $2,000,000 $2,500,000 $3,000,000 $3,500,000 $4,000,000 $4,500,000 $5,000,000 2021 2022 2023 2024 2025 Operating results Operating revenues Operating expenses Equity, 79% Debt, 21% © 2025 Baker Tilly US, LLP Source: current and prior year financial statement information and other benchmark information as noted. Page 5 Page 9 of 15 Germantown Sewer Utility Operating Results Unrestricted Reserves 2021 2022 2023 2024 2025 Year end balance 5,766,829$ 4,424,416 $ 8,565,905 $ 1,235,663 $ 4,232,910 $ Months on hand 9.98 7.54 13.82 1.90 6.96 Investment in Capital 6,937,534 7,037,371 7,436,723 $7,784,465 $7,295,764 $7,141,938 $6,865,395 $7,396,669 $8,325,848 $8,069,781 $6,000,000 $6,200,000 $6,400,000 $6,600,000 $6,800,000 $7,000,000 $7,200,000 $7,400,000 $7,600,000 $7,800,000 $8,000,000 $8,200,000 $8,400,000 $8,600,000 2021 2022 2023 2024 2025 Operating results Operating revenues Operating expenses Equity, 89% Debt, 11% © 2025 Baker Tilly US, LLP Source: current and prior year financial statement information and other benchmark information as noted. Page 6 Page 10 of 15 Utility Rate Adjustments The Village of Germantown Village Administrator and Finance Director, in collaboration with the Dept of Public Works, seeks approval for a 3% increase in water fees, using the Public Service Commission simplified approach. In addition, we will implement a 3% increase in sewer fees beginning January 1, 2027. Water Utility We are aware of the recent increase in water fees, and unfortunately, the Village is still operating at a loss. The current rate of return is (4. 2%). The operating loss in 2024 was $400,000 and the operating loss in 2025 was $870,000. Within a 25 mile radius, the Village of Germantown is still well below the median cost of water bill. In addition, the guidance for Days Cash on Hand should exceed the billing period, 90 days for the Village of Germantown. Our Days Cash on Hand is currently 30. Operating revenue should at least be enough to cover the cost of operations and depreciation, a ratio of 1.0. Our current Operating Ratio is .90. Page 11 of 15 It is not in the best interest of the Village to wait until a Conventional Rate Case is again necessary before increasing rates. The rate case takes about 6-10 months to complete and is very expensive, with those costs calculated into the new rate for recovery. Using the 3% Simplified Rate increase approach is our best course of action to begin moving toward a position of financial stability and increasing our cash on hand. The average increase will be $8.76 per household per year. Sanitary Sewer Utility The Village maintains 110 miles of sewer main, with 5,943 customers. The village contracts with MMSD for treatment and their annual charge is the largest expense, accounting for 67.8% of the operating expenses. The 2025 operating loss was $770,000, compared to $540,000 in 2024. Total net position decreased by $170,000, and the rate of return is (1.24%). The last rate increase was in 2024 and was insufficient in covering the rising costs. A 3% increase to both fixed and usage fees will be an average of $12.06 per household per year. We appreciate your consideration of this request as we look to improve the financial health of the Village, with minimal impact to its residents. Matt Trebatoski Lisa Davis Tim Zimmerman Page 12 of 15 BUSINESS OF THE UTILITY ADVISORY COMMITTEE MEETING DATE: October 6, 2026 PLACEMENT: Action Item ITEM TITLE: Consideration of a Sewer Rate Increase (ACTION) SUBMITTED BY: Lisa Davis, Finance Director SUMMARY EXPLANATION: The Sewer Utility’s last rate increase was in 2024. The Utility is still operating at a loss due to the rising cost of treatment and capital attributed to the MMSD. The recommendation is for a 3% rate increase on both volumetric and fixed to go into effect Q1 of 2027. Impact on average would be $3.02 per quarter or $12.06 per year for an average household. Rate increase would improve cash flow, and excesses would build reserves in anticipation of significant future capital expenditures. This item went before the Public Works & Highways Committee on September 2, 2026; a motion was made and passed to forward this item to the Utility Advisory Committee for input and approval. ATTACHMENT: 1. Dept of Public Works Rate increase request for 2027-revised STAFF RECOMMENDATION: The Public Works & Highways Committee requests the UAC provide approval of a 3% rate increase to go into effect Q1 of 2027 for the Wastewater Utility. ACTION BY COMMITTEE: Page 13 of 15 Utility Rate Adjustments The Village of Germantown Village Administrator and Finance Director, in collaboration with the Dept of Public Works, seeks approval for a 3% increase in water fees, using the Public Service Commission simplified approach. In addition, we will implement a 3% increase in sewer fees beginning January 1, 2027. Water Utility We are aware of the recent increase in water fees, and unfortunately, the Village is still operating at a loss. The current rate of return is (4. 2%). The operating loss in 2024 was $400,000 and the operating loss in 2025 was $870,000. Within a 25 mile radius, the Village of Germantown is still well below the median cost of water bill. In addition, the guidance for Days Cash on Hand should exceed the billing period, 90 days for the Village of Germantown. Our Days Cash on Hand is currently 30. Operating revenue should at least be enough to cover the cost of operations and depreciation, a ratio of 1.0. Our current Operating Ratio is .90. Page 14 of 15 It is not in the best interest of the Village to wait until a Conventional Rate Case is again necessary before increasing rates. The rate case takes about 6-10 months to complete and is very expensive, with those costs calculated into the new rate for recovery. Using the 3% Simplified Rate increase approach is our best course of action to begin moving toward a position of financial stability and increasing our cash on hand. The average increase will be $8.76 per household per year. Sanitary Sewer Utility The Village maintains 110 miles of sewer main, with 5,943 customers. The village contracts with MMSD for treatment and their annual charge is the largest expense, accounting for 67.8% of the operating expenses. The 2025 operating loss was $770,000, compared to $540,000 in 2024. Total net position decreased by $170,000, and the rate of return is (1.24%). The last rate increase was in 2024 and was insufficient in covering the rising costs. A 3% increase to both fixed and usage fees will be an average of $12.06 per household per year. We appreciate your consideration of this request as we look to improve the financial health of the Village, with minimal impact to its residents. Matt Trebatoski Lisa Davis Tim Zimmerman Page 15 of 15