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$6 million targeted for water system upgrades
Upfront funds ‘always part’ of agreement with suburbs
Peter Rebhahn
Green Bay Press Gazette

A $6 million upfront payment by Green Bay to nine suburbs in 2005, the first year of a proposed water deal, is only a little more than the new revenue the deal would generate for the city in the first year.

“That’s a nonissue for the utility given the income stream that’s going to be created immediately,” said Green Bay Mayor Paul Jadin.

The $6 million would be earmarked for water system upgrades in the suburbs needed to connect to city water.

The suburbs, operating as the Central Brown County Water Authority, voted last week to endorse a plan in which the suburbs would pay the city $1.23 per 1,000 gallons for treated drinking water starting in 2005.

The endorsement was largely symbolic, since only a vote by the authority’s member communities is binding. But the endorsement was a key step in talks that began 20 months ago.

The authority’s member communities are Allouez, Ashwaubenon, Bellevue, De Pere, Hobart, Howard, Lawrence, Ledgeview and Scott. The nine, plus Green Bay, are home to more than 195,000 people — 86 percent of Brown County residents.

The nine suburbs estimate their water use at 12.29 million gallons per day in 2005, or nearly 4.5 billion gallons per year. That volume translates into about $5.5 million in annual revenue for the Green Bay Water Utility at the proposed $1.23 per 1,000 gallons rate.

The $6 million payment was the last term of the deal to be ironed out, though not necessarily the most important. The payout also wasn’t new, at least in principle.

“It was always part of the deal,” said Len Teresinksi, water authority president.

The city accepted long ago the idea that it would need to give the suburbs a hand with the transition to city water, Jadin said.

“It’s been there since, probably, two years ago, except that we cut $1 million off it,” Jadin said.

Alternative versions of the $6 million payment called for the city to pay the suburbs $7 million, but according to formulas that created two separate payments years apart, the second coming as late as 2015. The authority opted for a quick nickel over a slow dime.

“In tomorrow’s dollars, you’ll need more,” Teresinski said.

Jadin said it’s too soon to commit the water utility to a funding source for the $6 million.

“They have some reserves that might be used, and they of course have the option to borrow for that infrastructure, just like they will for the raw water line,” he said.

The Green Bay Water Utility plans to build a second Lake Michigan pipeline at a cost of $25 million to $30 million next year with or without a deal with the suburbs. Bundling pipeline borrowing with the $6 million might make sense at current low interest rates.

“I’m sure it would become part of a bonding package along with the pipeline,” said Bill Nabak, water utility general manager.

Teresinski said the single, upfront $6 million payment had the virtue of simplicity — the declared goal of negotiators in recent weeks.

“The significant movement we made (in negotiations) over the last month was based on simplicity,” Jadin said.

“So the compromise was, ‘Let’s keep it simple.’ We’re going to let you use this for your infrastructure, but we’re going to take a million dollars off it.”

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