A consultant's report recommends increasing Elgin's water and sewer rates each year for the next five years. It also says implementing a system encouraging people to conserve water is not needed since consumption has decreased naturally.
The proposed 2014 budget, which the city council is expected to approve Wednesday, includes no water and sewer rate increases next year.
Low water rates are "our biggest economic development advantage in years to come," Elgin City Manager Sean Stegall recently told the city council.
Elgin's water rate is $3.38 for 100 cubic feet of water, while its sewer rate is $1.43 per 100 cubic feet of water. Those rates haven't increased for three years, Elgin CFO Collen Lavery pointed out.
Strand Associates suggested increasing water rates by 5 percent in 2014 through 2016, and 4 percent in 2017 and 2018.
The study also suggests a 11.9 percent increase in sewer rates in 2014, followed by increases between 3.1 percent and 5.8 percent in 2016 through 2018.
As part of its five-year plan, the city projected water and sewer rate increases beginning in 2015.
According to a survey taken by city staff in November, Elgin's average water bills -- or about $88 every two months for 16,000 gallons of water -- are the second lowest among eight neighboring communities, Lavery said.
Arlington Heights ranked lowest, while Hanover Park was highest, she said.
Those communities get their water from Lake Michigan, Elgin Water Director Kayla Jacobsen noted. Among communities that use river water, Elgin ranks lower than Aurora, Peoria, Moline, Bloomington, Rock Island and Kankakee, but higher than Decatur and Springfield, she said.
Water and sewer revenues make up the utility fund, which is projected to have $28.5 million in revenues next year and $29 million in expenses. The difference will be made up using cash reserves, Lavery said.
Water and sewer infrastructure -- which in some cases is 40 to 60 years old -- requires ongoing maintenance to avoid problems like water main breaks, Jacobsen said.
"Every year we postpone any improvements, that's just another year older the system is," she said.
In addition, Elgin has to perform federally mandated separation of storm and sanitary sewers to the tune of $98 million over the next 20 years, Jacobsen said. The city already has spent about $26 million.
"We are only budgeting $3 million per year. We are underfunding it," Jacobsen said. "The money has got to come from somewhere."
Stegall said the city council should take a closer look at the issue next year.
The city's overall consumption of water has been declining as residents buy appliances that promote water conservation, and fewer new lawns need to be watered due to a decrease in new construction, Lavery said.
Also, city staff members have identified and plugged a few leaks throughout the system, Lavery said.