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posted: 3/4/2014 5:00 AM

Editorial: Act now, but thoughtfully, on pipeline payback plan

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The Daily Herald Editorial Board

To put it mildly, businesses and residents in Cook County's Northwest suburbs got a bit of a jolt last week to learn that they're going to have to come up with $73 million to move a water pipe that's in the way of the Jane Addams Tollway expansion. The tab stems from an easement agreement signed in 1984 requiring the seven communities that make up the agency governing supply of Lake Michigan water to pay for any relocations of the pipeline. Six miles of the pipeline must be moved in order to accommodate the scheduled widening of the tollway.

The sudden realization of all this prompts some wide-ranging immediate reactions. "Why are we just learning this now?" for example. And, "Did the affected suburbs have any say in the widening that will end up costing them so much?" And, "At least we can thank the hard work and good faith of current suburban officials and tollway leaders for negotiating to narrow the burden for suburban towns (it was originally $120 million) and develop reasonable payback terms."

But beyond observations and questions like these, the most important reaction is to look to the future. For, the negotiated arrangement between the tollway and the towns, organized as the Northwest Suburban Municipal Joint Action Water Agency, provides at least seven years of breathing room. Actually, "thinking room" is probably a better phrase. Under the agreement announced last week, the tollway will front the suburbs the cost of moving the pipeline and won't charge any interest until January 2021. Then, three years later, the full note comes due.

As water agency representatives described in stories over the past week by Daily Herald Transportation Writer Marni Pyke, the towns -- Elk Grove Village, Schaumburg, Rolling Meadows, Hoffman Estates, Hanover Park, Streamwood and Mount Prospect -- will pay down the cost to the tune of $1 million a year for the next seven years without any impact on their water rates. How they'll adjust after that is less certain. They may raise rates to consumers. They may try to float a bond referendum. Maybe they'll do a little bit of both.

It's clear they'll have to do something -- and, they'll have to do it both in a measured way and as soon as possible. The soon-as-possible urgency must acknowledge that the more of the debt that can be paid off before 2021, the less cost there will be for water users or taxpayers in the affected towns to pay off the balance in 2024. The measured aspect of the equation emphasizes that the agency must study its options carefully to craft a payback plan that will least burden rate payers.

Users are already smarting from rate increases enforced by the city of Chicago last year, so another immediate hit is not a pleasant consideration. Even less desirable, though, is the proposition of a huge rate hike or tax increase 10 years from now because no other solution had been reached before the debt became due.

It's unfortunate a 30-year-old contractual provision managed to sneak up and bite rate payers. Thankfully, the tollway was willing and able to work with current suburban leaders to shave nearly 40 percent off the original bill. Now, everyone must do right by future rate payers and leaders and develop a thoughtful, deliberate payback solution -- as quickly as possible.

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