Oak Creek officials are moving toward a November ballot measure that would ask voters to approve a 2% sales-tax increase for capital improvement projects, as a new utility-rate study shows residents could otherwise face steep and sustained increases to monthly bills.

At their July 9 meeting, town trustees reviewed results of a comprehensive rate study that recommends double-digit increases across the town’s electric, water and wastewater systems to fund aging infrastructure and avoid future deficits. 

Later in the same meeting, board members signaled support for a sales-tax measure as a way to offset those costs and reduce pressure on local ratepayers.

Town Administrator Louis Fineberg said the two discussions are directly linked. 

“We just heard about the rate-study increases for capital improvement projects,” Fineberg said. “This is a way to keep those lower.”

The study, presented by consultant John Krajewski of JK Energy Consulting, found that Oak Creek’s utilities are currently financially stable but will fall into deficit within several years without rate adjustments to cover both operating costs and planned capital improvements.

Krajewski recommended increasing electric rates by about 9% annually over the next four years, driven by rising wholesale power costs and a five-year capital plan aimed at improving system reliability. 

For the water system, he proposed two consecutive 10% increases in 2027 and 2028, tied to major projects including work at Sheriff Reservoir and upgrades to the town’s distribution system. 

The largest increases would come in wastewater, where the study recommends 15% rate hikes in each of the next two years, citing regulatory risks and needed improvements to treatment and distribution infrastructure.

Taken together, the increases would raise the average residential utility bill by about $26 per month in 2027 and another $29 in 2028 — over $50 more per month after two years.

“If the current revenue doesn’t cover those expenses, there needs to be adjustments made,” Krajewski said.

Following the presentation, trustees turned to whether to ask voters to approve a sales-tax increase — a matter they discussed in April prior to the results of the rate study — to fund the same types of capital projects driving the rate hikes. Fineberg said a sales tax could help shift some of the financial burden away from residents, since a portion would be paid by visitors and others passing through town.

Otherwise, the costs of the rate increases would fall completely on town residents. 

“The advantage … is a large percentage is not paid by Oak Creek residents,” he said. “So you’re using visitors to Oak Creek to help fund Oak Creek’s infrastructure development.”

Fineberg also told trustees that recent legal guidance indicates the town could use sales-tax revenue to fund utility infrastructure without jeopardizing its enterprise status — a distinction that preserves the town’s ability to borrow money for utility projects without voter approval.

“That’s huge,” he said. “Because what that means is that you don’t even have to give up your right to borrow money … in order to use this sales tax to do improvements.”

The board had previously discussed several options, including separate 1% taxes for law enforcement and capital improvements, or a single 2% tax dedicated to infrastructure. Fineberg said a 2% sales tax would generate roughly $360,000 annually based on current figures and could be leveraged to support larger grant-funded projects.

“Every year, you could be doing between a $500,000 and $1 million infrastructure project with those funds,” he said. “This will fix your infrastructure in 10 years.”

During the discussion, multiple trustees expressed support for focusing on a capital-improvements tax rather than pairing it with a separate measure for law enforcement. Trustee Julie Gregory said she would prefer a 2% tax dedicated to infrastructure over rising utility bills.

“I would rather invest that in the community … than see my utility bills go sky high,” she said.

Trustee Kelly McElfish agreed. Mayor Melissa Dobbins said she has reviewed the town’s financial outlook and believes asking voters to approve a 2% increase is the most viable path forward.

“We put the power in the voter’s hands,” Dobbins said. “And if the voters vote it down, that’s their choice, and then we’ll have to utilize the rate study … to try to get ourselves out of this situation.”

“But we’re so far deep now that I don’t know that we have an effective and efficient way to get us out of this,” she added.

Trustee Bernie Gagne also voiced strong support, pointing to what he described as urgent infrastructure needs — particularly in the town’s water system, which he said is “reaching critical mass.”

Gagne said he would support at least a 1% tax for capital improvements, but signaled openness to delaying any separate tax for law enforcement until the town has clearer data on staffing needs. 

Trustee Sascha Stanger said he supports a sales-tax increase but raised concerns about taxing groceries, suggesting essential goods should be exempt if possible.

Trustees also briefly revisited the idea of a commercial vacancy tax, which had been discussed earlier this year as a way to address empty downtown buildings. 

Gagne described the concept as “pretty controversial,” noting strong public reaction during previous discussions and potential limitations under state law. Fineberg said the idea remains on the table but would require further research, calling it a “legal gray area” that may not be feasible in the near term.

Fineberg said that if the town moves forward with a sales-tax measure, it would be accompanied by an ordinance clearly defining how the revenue could and could not be used to ensure transparency.

In a follow-up statement on Thursday, Fineberg said trustees are expected to vote on an ordinance to place a 2% sales-tax measure for capital improvements on the November ballot at their July 23 meeting. The town must notify the county clerk by July 24 to place a measure on the ballot.

The decision comes as Oak Creek weighs how to address mounting infrastructure needs while balancing the cost to residents — a challenge that looks likely to now sit squarely with voters. Without additional revenue, officials say, the rate increases outlined in the study may be unavoidable.