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updated: 3/3/2014 5:33 AM

Negotiations with tollway whittled cost from moving pipeline

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  • Relocating parts of a water pipeline serving seven Northwest Cook towns is a complicated and costly process.

      Relocating parts of a water pipeline serving seven Northwest Cook towns is a complicated and costly process.
    Photo courtesy of the Illinois tollway

 
 

Oh to be in the room when Northwest Cook County mayors learned it would cost millions to move a water pipe in the way of I-90 expansion.

"We were knocked head over heels," Hanover Park Mayor Rodney Craig said. "Here's a (multimillion dollar) bill from the tollway lying in our laps and it's based on a 1984 agreement."

The 1984 agreement involved the Illinois tollway allowing the Northwest Suburban Municipal Joint Action Water Agency an easement for 16 miles of pipeline adjacent to the Jane Addams Tollway (I-90). The caveat was the agency would foot the bill for any pipeline relocations.

Fast forward 30 years and sections of the pipeline are smack dab in the middle of new grading, pavement and sound walls required for the I-90 project.

The first reaction to the cost -- originally estimated around $120 million -- was shock. "The whole notion for me was absurd," Craig said. But "all our attorneys said, 'this is what we've got to do.'"

What followed were months of intense negotiations.

Water users in the seven towns in the water district -- Elk Grove Village, Schaumburg, Rolling Meadows, Hoffman Estates, Hanover Park, Streamwood and Mount Prospect -- have been hit with some hefty water increases from Chicago recently.

"I couldn't have imagined passing on that bill to the users of our water," Craig said.

When the bill still surpassed $100 million, Craig recalled asking local lawmakers and Gov. Pat Quinn's office to get involved and jumping in his car for a face-to-face talk with tollway Executive Director Kristi Lafleur where "we tried the best we could to whittle it down."

The result is the water agency's customers will pay about $73 million for the project. The tollway will front the costs and charge zero interest until 2021 when a 3 percent interest rate applies. In 2024, the entire amount is due or a 3 percent fee will be applied and an 8 percent interest rate kicks in.

"The end product is a result of tough negotiations all over the place and agreeing to work for a solution to the best of everyone's ability. Within these confines we came up with an agreement ... I'm biting my tongue ... that we can all live with," Craig said.

Come 2024, "we have some choices to make when that date comes. If we have to do a long-term bond, at least we can buy some time."

Currently, officials said rather than hiking rates outright, they favor borrowing over the long term and keeping rates level, although that means customers will be paying debt service for some time.

During the zero-interest period, the water agency will pay about $1 million a year and more if funds are available.

Craig also notes the agency's cost is capped at $73 million and it won't be responsible for future relocations related to transit on I-90. "It's not like a runaway freight train," he said.

One more thing

I asked the tollway how they approached the negotiations, what the zero-percent deal will cost and why the extra fees after 2024. Here's what spokeswoman Wendy Abrams said:

"The terms of this agreement represent the best interests of both local residents served by the water main and the tollway's customers," Abrams said in an email.

"Both agencies have made it a top priority to find a solution that could help us achieve our two collective goals: work together to reach agreement on a fair plan to fund the project without immediately impacting local residents, and find an engineering solution that would pose the smallest possible risk to the supply of water that serves one half million people every day.

"Our agreement with (the Northwest Suburban Municipal Joint Action Water Agency) shows that the tollway has an appreciation for the fact that the agency is not in a financial position to pay the relocation costs upfront. As is the case with other construction projects like new interchanges and our recent work on the I-355 extension, the tollway is funding a modest subsidization of interest in the first few years. We think that's fair. The accommodation we made on the timing of the repayment allows us to ensure that the I-90 rebuilding and widening project can continue on time and on budget."

So what do you think? Good deal? Bad deal? Drop me an email at mpyke@dailyherald.com. And, follow me on Twitter at @DHInTransit.

Your voice

Letters, letters ... we love letters (and emails). Let's start with Metra rider Norbert Macuga, who lives in Bridgeport and works in Naperville. Macuga finds the lack of reverse commute options disappointing. "Combine that with the poor quality of the Metra stops in the city and it's a wonder anyone chooses to use Metra for their reverse commute," he writes.

"I get on the BNSF with about 20 other commuters at Western Avenue every morning where rusty corrugated sheet metal and crumbling concrete are the norm. If Metra can successfully implement electronic tickets, maybe they can track commuter flow more accurately and they will realize that they are missing a huge opportunity for capitalizing on reverse and weekend commuters who have few options for mass transit. Currently, when I buy my 10-ride, there is no way for them to tell where I board the train or at what time. It is particularly galling to imagine that Metra may think I am boarding in Naperville in the morning and Union Station in the evening!"

Upcoming

The village of Bensenville will host an open house on Elgin-O'Hare Western Access from 3 to 6 p.m. March 11 at the village hall, 12 S. Center St. To learn more, go to www.bensenville.il.us.

Gridlock alert

If you're cruising around on Harrison Street in Chicago, be prepared for traffic starting today. The city is closing down the Harrison Street Bridge over the Chicago River between Halsted Street and Des Plaines Avenue through Sept. 1 to replace the structure and erect new lighting and signals.

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