OMRO AND ALGOMA SANITARY DISTRICT
A FORMAT FOR A
SUCCESSFUL CONSOLIDATION
Kevin Mraz
Utility Director
Algoma Sanitary District
A FORMAT FOR SUCCESSFUL CONSOLIDATION
BACKGROUND INFORMATION
 Algoma Sanitary District
 Omro Sanitary District
 9,000 Population
 1000 Population
 2600 Sewer connection
 330 Sewer connection
 870 Water connections
 65 Water connections
 $672 million Equalized Value (E.V.)
 $71 million Equalized Value(E.V.)
 1.3% Debt Ratio to E.V.
 3.1% Debt Ratio to E.V.
ALGOMA SANITARY DISTRICT #1
 We are a municipal entity duly established by Wisconsin Statute 66.71.
 Our District currently is a municipal Drinking water utility and operates
our own sanitary sewer collection system.
 We do contract out for WWTP sewage treatment services with
Oshkosh WI. (generally the economy of scale with a larger combined
municipal system reduces the cost below constructing our own
WWTP)
FACTS IDENTIFIED TO REINFORCED
A NEED TO CONSOLIDATE
 Expense reduction (Redundant expenses)
 Market share (Larger territory)
 Improved financial strength (increase retail customers and overall return
on investment)
 Bonding improvements (AA- from S and P will allow for reduced
interest expense from notes and bonds on Omro side)
 Reduce future rate spikes (smooth expense occurrences across a larger
market)
 Create a bigger economy scale (buy in bulk)
LEGISLATION
60.785 Changes in district boundaries.
(2) CONSOLIDATION. (a) Any town sanitary district may be
consolidated with a contiguous town sanitary district by resolution
passed by a two−thirds vote of all of the commissioners of
each district, fixing the terms of the consolidation and ratified by
the qualified electors of each district at a referendum held in each
district. The resolution shall be filed as provided in s. 8.37. The
ballots shall contain the words “for consolidation”, and “against
consolidation”. If a majority of the votes cast on the referendum
in each town sanitary district are for consolidation, the resolutions
are effective and have the force of a contract. Certified copies of
the resolutions and the results of the referendum shall be filed with
the secretary of natural resources and the original documents shall
be recorded with the register of deeds in each county in which the
consolidated district is situated.
HOW TO CONSOLIDATE
Leadership
Vision
Identify Opportunities
Mission Statement
Ability to act
BEHIND THE SCENES
 Based on our visionary Commissioners of our District it was as far back as 2003
that I was reading statutes with our commissioners to determine the process and
the potential of a consolidation or joint water authority.
 We continually reviewed the possibility and about 3 years ago we set up the first
formal meeting with the Town of Omro SD. The discussion also included the formal
recommendations of multiple enforcement and authoritative agencies including the
PSC and ECRPC. (I had researched and prepared details of benefits and identified
$70,000 of cost savings that were used as discussion items).
 Following this meeting we had several joint meetings to discuss the process and
review the possible outcomes review the potential consolidation. I did pull in the
PSC, an accounting firm, and financial planner to reinforce the benefits from third
party view points.
 Pros and cons were identified as well as everyone was encouraged to list there goals
of the consolidation.
 We then drafted the terms of consolidation incorporating both Districts goals.
CASH FLOW DECISION
FINANCIALS IN A NUT SHELL
 Cash flow needs to include (we project out to life of bonds)
 Debt Schedule
 Revenue
 Expenses
 Inflation and growth estimates stay conservative
 Costs of consolidation
 Referendum
 legal attorneys
 Accounting merge(staff)
 Ordinances, handbooks, policies
 Infrastructure upgrades (SCADA) machinery, hardware, software
 Moving expenses
 Savings
 Redundant positions staff, board members, legal attorneys
 Audits
 Insurance
 Statutory reporting compliance reduction
ELECTED OFFICIALS:
THIS IS A POLITICAL DECISION
 Impact on Constituents
 This will affect the local electorate
 Local economy
 This will affect the local employees ( who are the constituents you serve) Jobs are critical
point of information.
 Terms of board to complete the consolidation
 Strong foundation for future boards to continue process
 Sometimes the right decision is the hard decision
 Are you ready to reduce work staff in exchange for reduce costs/taxes
 The commissioners voted to remove themselves from office.
 We eliminated 3 commissioner positions.
 Are you willing to do the right thing?

Base your decision on doing what is right.
CUSTOMER SERVICE
 Office locations distance to customers.
 Level of proposed services better or worse.
 Streamline process or permits.
 Upgrade communications website, cable, etc.
PUBLIC RELATIONS
ADVERTISEMENT
 Annual and quarterly reports that are.
 Cable Channel

This was an inexpensive method to inform the public
postage already paid.
 Free

Space was available in statutorily required reports
 available at all hours
 Public meetings

Time consuming

Difficult to obtain audience based on schedules

Good for Q and A

Good face to face credibility
 Bill stuffers

Assured to be delivered to each constituent

Small size little space for details

Not always read or reviewed
 Newspaper

Limited readers not everyone gets paper and may not
be headline on website

Risk creating controversy based on reporters opinion
 Website/ social media
 We used and advertised on our
website
 Directed to website from mailing
 Did not use social media for our
situation
 Available 24-7
 Local postings
 We used the local gas station to
display highlights
 Yard signs
 We placed 50 informational signs
throughout towns
FACTORS OF A SUCCESSFUL
CONSOLIDATION
 Mission/ Vision statement
 Identify the goals
 Savings/ economy of scale/ Duplicated services/ Redundant costs ( insurance, Audits, etc.)/
streamline
 Identify markets that can be consolidated
 Pros and cons
 Most importantly it starts with quality leadership. The Leader entity needs the ability
to envision the future and to identify opportunities that can be explored and plan
for them accordingly to be in position to act.
 I owe my successful consolidation to many foresightfull leaders that encouraged me and gave me
enough latitude to explore these concepts.
 Good leadership will foster these conceptual ideas to fruition
 Employees
 Chain of command current and proposed
 Where do the current staff fit
 Terminations
OUTCOME POTENTIAL
 We anticipate a savings of $70,000 annually, in which most is already being
recognized.
 Greater negotiation ability for WWTP services.
 Growth potential is multiplied by at least 3X’s
 Tax levy savings
 Water rate reduction
 Sewer user fee reduction
CHALLENGES REMAINING
 Waiting for confirmation from DNR.
 Many annual reports are required and these need to be removed.
 Water sampling requirements need to be reduced
 Waiting on PCS to approve consolidation and set new rates for Omro
residents.
 Methods for successful recording of parcel identifications.
 Final audit and financial incorporations
 *** legislation is not well defined as to town that oversees the petition
for addition of new properties when multiple towns are involved. We
will be working with the A.G. for an opinion on this.
REFERENDUM RESULTS
 The final election results came in at 84% in favor of consolidation.
 This has been a smooth transition but has some major challenges that
required much planning.
Questions and answers
Kevin Mraz
Utility Director
Algoma Sanitary District
920-426-0335