Ratepayers could see their fees increase next year to help fund projects in the village's sewer utility district.

Caledonia's 2013 preliminary budget focuses on keeping village services at status quo with a tax levy increase of less than 1 percent — but Village administrator Mark Janiuk strongly opposed a request from the sewer and water utility department for more tax money, which could mean extra charges for individual users.

Janiuk presented his first budget to the Village Board on Monday night, and called for an outside review of the utility department to "see what options the village has in regards to these services," after the department asked for a levy increase from the village.

Janiuk also chastised utility officials for not meeting with him to help them frame the budget and said the format in which the budget was presented was unacceptable. Bob Bradley, chairman for the Caledonia Utility District, took issue with Janiuk’s comments.

“I think he’s out of line with his comments about the utility district not working well with the Village; that’s the furthest thing from the truth,” Bradley said. “The village asked us to take care of our own finances.”

Officials with the water and sewer utility requested $42,827 and Janiuk called the request "disconcerting." He pointed out that the tax levy amount would need to be taken from the police or fire department.

Janiuk warned board members that the village cannot afford to spend their tax levy dollars on the water and sewer utility. Water and sewer utilities are enterprise funds, which means that they operate semi-independently from the village. However, Janiuk pointed out, according to an audit done in 2011, the utility rates in 2011 did not cover the operating costs.

"If the utilities cannot operate within the revenue stream generated by user rates and if demands for levy dollars are increasing, the degree of independence needs to be examined," Janiuk said.

Bradley said the request was made because they lost a water rate case with the Public Service Commission. The rate case mirrored the one Franklin filed against Oak Creek after they increased the wholesale water rate by 35 percent to cover fire protection.

“Mark is saying that we should be paying for the increase with our operating expense, but if we do that we would need to raise rates and we don’t want to raise our rates,” Bradley said. “The board and the public needs to understand… what you do you here is important in these situations. We’re not going to put it on our rates and they are not going to put in on the levy, so the money has to come from somewhere and now what are we going to do?”

Janiuk then presented the rest of the preliminary budget to the Board.

The general fund, which includes most of the village’s operational funds, is expected to decrease by $3,114 — or .03 percent — to $9.4 million in 2013.

Still, the 2013 proposed budget would raise the tax levy by $55,983, or .47 percent, to $13.2 million, which reflects the amount of new growth in the village, Janiuk said. The Village budget includes the general fund, debt service, capital projects, joint health, joint parks, cemetery, park enterprise, and the Village utility funds.

The Village Board will meet with each department to discuss their budget request and changes are likely to be made when Janiuk receives firmer numbers for insurance costs, state aid and the decision on unresolved union contracts with the police and fire unions. Because the budget is still preliminary and has not been finalized, the impact to taxpayers has not been released.

Here are just some of the budget assumptions:

• Increasing the amount nonpublic safety employees pay for health insurance, which would save the village $31,000.
• Increase in building permits being pulled is expected to increase revenue coming into the general fund.
• Borrowing has increased and the cost of that debt is expected to be $165,000, which includes the loss of funds from paying the bond obligation and paying off the Four Mile project.

The next budget meeting will be held at 6 p.m. Wednesday at the East Side Community Center, 6156 Douglas Ave.