Blackhawk water tower

The Madison Water Utility is facing a $6 million deficit after revenues were less than expected in 2017. Pictured above, workers guide concrete into the base of the utility's Blackhawk water tower in August 2017 on Madison's Far West Side.

After a tense discussion, Madison’s City Council approved renewing a five-year contract for the general manager of the city's water utility.

Tom Heikkinen was hired in 2008, and his position comes with a $151,011 annual salary. His contract has been under question since the Madison Water Utility discovered a $6 million deficit, stemming from a decline in revenues from the budgeted $45.6 million to about $38.1 million. 

The utility is looking to sell eight unused properties, obtain a loan from the city, delay capital projects and reduce operational spending to address cash flow.

The council voted 14-4 in favor of renewing the contract with four conditions set by Mayor Paul Soglin to address the financial state of the utility. Those conditions include:

  • Finalizing a Public Service Commission rate case and issuing debt by Dec. 31.
  • Finalizing a schedule for the sale of surplus property with the Office of Real Estate Services by Dec. 31.
  • Adoption by the City Council of a resolution formalizing a loan to the Water Utility from the city’s general fund.
  • Reporting quarterly to the City Council, Water Utility Board and Finance Committee on monthly cash balances, annual cash forecasts and long-range financial modeling, including a consistent and timely schedule for rate increases.

If the conditions are not met, Soglin said not only will a salary increase not be awarded but that the position will be terminated.

Alds. David Ahrens, District 15; Rebecca Kemble, District 18; Keith Furman, District 19; and Allen Arntsen, District 13; voted against renewing Heikkinen’s contract. The Council’s decision follows the Water Utility Board’s 3-2 vote  against renewing Heikkinen’s contact.

Ahrens, who is also a member of the Water Utility Board, strongly opposed renewing the contract and pushed back against claims that the board’s recent vote not supporting contract renewal was a punitive measure.

“The problem of not knowing very important issues concerning the operation of a major utility continue,” Ahrens said.

Ahrens had previously advocated imposing a probationary period on Heikkinen. However, Soglin strongly disagrees and said probation can be used after a recent hire and following a formal investigation.

“I did not conduct a formal investigation nor did the water utility board,” Soglin said.

Soglin also said there are questions about a possible breach of open meetings laws over discussion of the contract issue.

Speaking as an individual, Lauren Cnare, who is also the chair of the Water Utility Board, called Heikkinen a “visionary leader” who has supported innovative ideas such as the Water Conservation House and community engagement.

Cnare did not minimize the problematic $6 million deficit but opposed punitive measures such as probation.

“I think there is enough punishment that has taken place in the form of public humiliation,” Cnare said.

Vehicle registration fee 

Also at the meeting, the City Council voted to place a proposal creating a vehicle registration fee on file. The motion was approved on the consent agenda without discussion. 

Soglin introduced the $17 fee in June as a way to close a a budget gap heading into 2019. 

If implemented, the fee was expected to raise about $3.3 million for the city and would replace funding from the property tax that is currently used for Metro Transit.

The Finance Committee, City Council Executive Committee and Equal Opportunity Commission also did not support the proposal. 

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