Ashland Utility Budgets Include Deficits

Proposed 2012 budgets for the City of Ashland's utilities include deficits totaling more than $200,000, according to city council agenda documents.

On Tuesday, the city council plans to consider adopting a $1.75 million budget for the water utility and a $1.88 million budget for the waste water utility. The proposed water utility budget has a $137,800 deficit, while the waste water utility budget has a $83,500 deficit.

Also on Tuesday, the council is expected to consider a proposal to study whether utility rates need to be increased. Ashland utility rates haven't changed since 2001, and city officials have said a rate increase is likely necessary to both balance the utility budgets and upgrade deteriorating infrastructure.

“These shortcomings will need to be funded through the utility's rate structure,” Tuesday's agenda documents state. “In addition, due to the fact that rates have not been reviewed for over the last decade, the city needs to determine if the present rate structure is appropriate and will even support standard (operating and maintenance) costs.”

Baker Tilly, a Madison-based firm, has offered to conduct a rate study of Ashland's two utilities for $16,900.

City officials say the study is needed, in part, because the state Public Service Commission hasn't reviewed Ashland's rates since 2001. Only the Public Service Commission is authorized to adjust municipal utility rates.

“Had the utility proposed more frequent rate increases, the submittal of the rate study could have been avoided,” agenda documents state.