The Des Plaines City Council voted against a 15 percent increase in the city's water and sewer rate to pass on a 15 percent water rate increase this year by Chicago and to cover the city's own higher operation and maintenance costs.
Several aldermen suggested the city should find a way to absorb the increased costs to keep residents' bills down.
However, the water and sewer fund has been running a $2 million deficit for the past four years, City Finance Director Dorothy Wisniewski said. And the decision Monday will leave the fund $890,000 in the red by the end of 2013. The proposed water rate increase from $4.075 to $4.686 per 100 cubic feet would have put the fund balance at a positive $2 million by year-end.
Chicago's rates went up by 25 percent in 2012. Des Plaines in turn raised its own water/sewer rates by roughly 21 percent.
Wisniewski said if the city takes no action to pass on Chicago's continuing rate increases -- going up 15 percent each year until 2015 -- the water and sewer fund deficit will continue to grow. The deficit is projected to be $4.6 million in 2014 and roughly $9.4 million by 2015 based on the increased costs.
Ward 4 Alderman Dick Sayad suggested the city take $1 million out of its reserves to replenish the fund. "I want to give some relief to the residents of the city of Des Plaines," he said. "We have the money. Let's give them a pass for one year."
The city's general fund reserve balance is expected to be at roughly $18 million by year end.
Ward 7 Alderman Dan Wilson said residents who use less water should not be subsidizing heavy users, which is what would happen if the city used taxpayer funds to plug the deficit in the water and sewer fund.
"Right now, if we are giving the money, if it comes out of casino tax, sales tax, it's still Des Plaines' money," Wilson said, adding that he would rather see casino money used for fixing sidewalks, streets, and the water system so that everyone can benefit in the long run.
Ward 6 Alderman Mark Walsten said the council cannot decide to put $1 million into a fund without proper discussion. "I think it's premature to arbitrarily throw $1 million at this thing. But I think we need to cover the cost of the increase from Chicago," he said.
Ward 8 Alderman Mike Charewicz said the council would do a disservice to residents in the long run by not passing on Chicago's rate increase.
"We are just making it worse for ourselves," he said. "This is not a very politically good thing to do, but we have to do it."
Wisniewski said the city hasn't undertaken major capital improvement projects, such as water main repairs, due to the deficit in its water and sewer fund. Depositing $1 million into the fund wouldn't solve the problem because revenues are still not enough to keep up with expenses, she said.
Motions to transfer $1 million from reserves to cover the deficit and to pass the water rate increase both failed by a 6-2 vote.
Des Plaines has authorized two feasibility studies to determine the costs of getting water from sources other than Chicago. The city is in the second year of a 10-year water deal with Chicago. The studies will explore the possibility of purchasing Lake Michigan water through either the villages of Wilmette and Glenview or the city of Evanston to supply Des Plaines' roughly 57,000 residents.