DuPage water panel lowers emergency reserve fund

The DuPage Water Commission lowered its emergency reserve fund requirements Wednesday in an effort to expedite payback of debt acquired when the agency accidentally spent most of its $69 million reserves last year.

The commission has multiple reserve funds for a variety of needs and are required to be separate for borrowing, agency officials said.

Instead of carrying a minimum of $20 million in its emergency reserve fund, the commission will only carry $13 million in the future. Currently, $20 million of the $70 million the agency borrowed following the discovery of misspent funds is in the commission's emergency reserves. Commissioners plan to use the excess $7 million to help pay off the emergency loans that come due in December and March.

Commissioner Don Zeilenga, who has been the commission's acting treasurer, initially suggested one month's operating expenses be kept in reserves. That would have amounted to about $6.5 million.

"The lower we can make the contingency fund, the more we'd have to pay back the emergency debt," he said.

However, a slim majority of the commissioners were more comfortable with two months of operating expenses in the reserve fund.

"That policy we had where the thought we had $20 million in reserves gave us the cushion to take care of the problems we found in November," commissioner Greg Mathews said.

But commissioners wanting a lower amount suggested if the reserves hadn't been so high, the agency's financial problems would have been discovered sooner. In addition, a lower emergency fund balance could keep costs lower to residents. Water rates are expected to rise significantly in 2016 if Gov. Pat Quinn signs a bill that eliminates a quarter-cent sales tax that goes to the commission and generates roughly $30 million a year.

"For us to have that much in these economic times is unnecessary," commissioner Jim Zay said. "We got in this trouble because of how much money we had in the reserves, and we've got other funds we can go to if there's an emergency."

Only commissioner Tom Bennington voted against the lower amount.

"I'd like to see it remain at the current level," he said. "It doesn't hurt to have some extra savings. I'm not sure moving it down ... has a lot of analysis behind it."

Two months into the agency's current fiscal year, finance staff reported that water use was down in May and June by 2 percent over last year's amounts. They blamed wet weather in those months for the sagging numbers. However, sales tax figures were up by $284,000 over the first two months of last year.