Buffalo Grove to almost double water rates
Buffalo Grove has one of the lowest water rates in the Northwest suburbs. In fact, “we actually had a period of 23 years with no water increases,” Finance Director Scott Anderson said at last week's village board meeting.
Those days are over. The village did raise water rates about 20 percent in 2006, and rates are poised to rise even more sharply in the future. It is a virtual certainty that at the next village board meeting, the trustees will approve a plan that will almost double rates in the next two years.
The measure was tabled for two weeks after resident Rob Sherman complained that the item was listed in the agenda as an amendment to village code, not as a rate increase. Sherman called that evasive and tricky language.
Village President Jeffrey Braiman said he wouldn't characterize it as evasive, but allowed it was “maybe not as full as it could be.”
The board agreed to Trustee Steven Trilling's proposal to table the measure after Anderson assured trustees that passing the plan at the next meeting would still allow some time before the village met with the bond rating agencies that would be examining the state of the village's enterprise funds.
“It's tight, but we can manage,” Anderson said.
Under the plan, beginning Jan 1, the rate will be at $3.24 per 1,000 gallons of water, a 35 percent increase. This will result in a combined water and sewer rate of $4.05 per 1,000 gallons. The second rate increase, beginning Jan. 1, 2014, will raise the water rate another 30 percent to $4.21 and the sewer rate to $1.05 for a combined rate of $5.26. Beginning Jan. 1, 2015, the recommendation is that inflationary growth of 4 percent be added annually to the previous year's rate.
Anderson said the reason behind the long period of stability in the rate was the significant amount of development the village enjoyed over the years — and the additional revenue it brought. That revenue served as the pipeline for capital projects, while also offsetting operating expenses.
But development — and the corresponding revenues — slowed in the early part of the last decade, and water consumption fell. Energy efficient appliances played a role in that decline, as did a drop in the number of people who live in each residence, Anderson said.
And as the infrastructure started to age, the village responded by pouring $4 million back in the system, installing a deep well system, replacing sections of water main along Arlington Heights Road as part of the road rehabilitation project and making significant repairs to lift stations.
In comparison of 50 nearby communities, only Evanston and Highland Park have a less expensive water rate, and they are able to draw it directly from Lake Michigan unlike inland suburbs, Anderson said. The average water rate of those 50 communities is $4.73, double Buffalo Grove's current rate.
The combined water and sewer rate of communities that, along with Buffalo Grove, belong to the Northwest Water Commission, is higher as well. Buffalo Grove's current combined water and sewer rate is $3 per thousand gallons, compared to $4.80 in Palatine, $5.05 in Arlington Heights and $6.30 in Wheeling.
Anderson said the new rates would help stabilize the water and sewer fund, anticipate capital needs, and build a reserve funding mechanism to ensure the water utility can continue with a philosophy of pay-as-you-go infrastructure repairs.
Trustees seemed agreeable to the increase.
“At this point it would not be responsible to continue at that price, and I do recognize that we do need to raise the rates to be able to fund the infrastructure in the future,” said Trustee Andrew Stein.
Village President Braiman said, “This board and our staff took great pride in keeping the rates as low as they were for a number of years. But there's a price to pay. Obviously, we have had cheap water for a long time, and unfortunately we have to raise (the rates). This is a reasonable way to do it.”