Calculating rates for wastewater services
Service charges are the primary source of revenue for the District. Charges are paid to the District by our municipal customer communities, as the District does not bill households or businesses directly for wastewater services. Residential and commercial customers with questions regarding their water/wastewater bill should contact their municipality directly using the contact information on their bill.
What are service charges?
Service charges are the main revenue source for the District. Service charges cover costs such as building new sanitary sewer infrastructure across the service area to address population growth, aging infrastructure, and maintaining wastewater treatment equipment at the plant
Service charges are paid by the 24 municipal customer communities in our service area (e.g. Middleton, Fitchburg, Monona, etc.) A community’s charges are based on the impact it has on the system. Communities that send more wastewater and high-strength waste pay a proportionalely larger share of District costs. This fairly allocates District costs to the communities we serve.
The District’s customer communities recover District costs from individual residents and businesses. Communities also charge residents and businesses for the communitiy’s own costs related to local sanitary sewer maintenance and infrastructure needs.
What rules govern service charge rates?
The District’s Sewer Use Ordinance sets the rules that District staff follow in calculating service charge rates each year:
- Rates must be set for seven billing parameters: wastewater volume, carbonaceous biochemical oxygen demand (CBOD), suspended solids, nitrogen, phosphorus, count of each community’s water/wastewater utility customers, and count of each community’s utility water meters.
- Rates must reflect actual District costs, based on the total operating budget and the total combined capital and debt service budgets.
- Rates must be set to generate revenue needed to balance the budget.
To set rates, staff use a rate model that incorporates budget information, historical values for the billing parameters, historical service charges revenue and forecasts of the likely amounts of each billing parameter.
How can communities budget for charges?
Actual customer community charges are determined during the year as the District measures the billing parameter amounts for each community.
To help communities prepare their budgets, the District provides a forecast of total community services charges for each community. We provide an early forecast in September and a final forecast after the budget is adopted at the end of October. These forecasts are based on rates, current trends for each community, and unique factors for individual communities, if applicable.
The District encourages communities to budget reserves to manage potential higher-than-forecast charges.
How are quarterly service charge bills calculated?
Communities receive bills from the District each quarter based on the actual wastewater volumes and strengths measured during that quarter.
Each quarter, District staff measure volume and take samples of the wastewater coming from its customer communities into the Nine Springs Wastewater Treatment Plant. Based on those samples, staff calculate the estimated quarterly volume and strength of wastewater for each community, which is then multiplied by the service charge rates to determine the quarterly bill. Quarterly bills also include charges based on the customer and meter billing parameters.
How do District service charges compare to regional averages?
In 2024, the average household in Madison paid $428 per year, or $35.67 per month, for wastewater treatment services. This includes both District service charges and charges added by the City of Madison to pay for city sanitary sewer-related costs. This amount compares favorably to the 2024 regional average of $545 per year, as reported by the National Association of Clean Water Agencies in its 2024 Cost of Clean Water Index.
Based on the District’s 2026 Operating Budget & Capital Improvements Plan, the District-only charge total annual household cost is $289 for 2026, compared to $281 in 2025. (Individual communities also add their local sanitary sewer charges, so these figures only represent part of a household’s total annual sanitary sewer cost.)
