As I wrote about yesterday, the South Milwaukee Common Council on Tuesday unanimously approved a resolution authorizing the issuance and sale of $968,000 in taxable general obligation promissory notes for water system improvements and expenses.
In plainer language, the city is borrowing the money from Tri-City National Bank to help the South Milwaukee Water Utility fund operations, upcoming bond payments and minor infrastructure needs. The utility will then pay the city back through revenues from utility users — you and me — allowing the city to repay the loan by 2013 … hopefully even sooner.
So, why the need for the cash infusion? A number of factors are at play here, but the two biggest drivers are an overall and continuing decline in water usage — including a major reduction by Bucyrus International, the city’s largest single water user — and costs associated with its recent plant upgrades.
And what does this mean for you? Unfortunately, you can expect a large rate increase in coming months to help pay for the loan repayments and to make up for the utility’s declining revenues. I’ll keep you posted on that, once the increase goes to the Wisconsin Public Service Commission for review.
While I wish the city, and the utility, weren’t in this position, we are. And we’re dealing with it as best we can … ensuring that our our water utility remains vibrant and a real South Milwaukee strength.
South Milwaukee Blog 
BRAVO to South Milwaukee for remaining independent of MMSD! However, in the next 50 years, water will becoming as valuable as oil. We need to keep an eye on our businesses who are getting water deals.
It is great that SM is independent of MMSD and does not have to rely on purchasing water. However, at a time when there are lots of homes in SM in foreclosure, unemployment is almost 10%, businesses are struggling, and my realtor tells me there are more homes that will be in foreclosure in SM in the coming month, including the fourth district, is this really the time to be raising rates by 30% or more???? People are using less water to keep their bills down to save money and municipalities including SM are raising rates because of this. There is going to be a time shortly when local businesses will not be able to afford staying in business due to increased overhead costs and a decrease in sales due to this economy.
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