Bartlett, Elgin negotiating 35-year water deal

Elgin and Bartlett are negotiating a multimillion-dollar, 35-year water deal significant for both communities.

Under the proposed agreement, Bartlett will get all its water from Elgin starting in 2019. The village now gets about half its water from wells and half from Elgin, which draws it from the Fox River.

The deal is expected to bring millions in additional revenue for Elgin and stability in water supply and costs for Bartlett, officials said, both especially relevant in a climate of fiscal uncertainty for local municipalities.

Bartlett

In order to get all its water from Elgin, Bartlett would spend $18.5 million in capital projects by 2019, including improving the Lake Street pump station, adding a second pump station somewhere near Route 25, and building an additional water tower and reservoir, Bartlett Public Works Director Dan Dinges said.

“It's our water supply for the next 35 years. It's a big deal,” he said. “Obviously we need to make sure we have our water source secured, and this will take care of it.”

The village board gave an early OK this month to enter into negotiations with Elgin for the proposed agreement, Dinges said. That came after about two years of analysis during which Bartlett looked into getting all its water from the Northwest Suburban Municipal Joint Action Water Agency, which supplies Lake Michigan water from Chicago, or getting half its water from the agency and half from Elgin.

“There is uncertainty about what the city of Chicago is going to do with the contracts they have with the different (agencies) they supply water to. A lot of the board members were concerned with that,” Dinges said. “We are more comfortable with Elgin. In 30 years we haven't had to deal with too many rate swings.”

All Bartlett residents will get softened water by 2019, which means those who are softening well water on their own will save $16 to $20 per month, he said. “That is the biggest benefit,” he said.

Water rates in Bartlett are projected to increase from $6.36 to about $11.35 per thousand gallons by 2019 - or a $21 monthly increase for the average household - to fund the capital improvements, to be financed by possible bonds, low-interest state environmental loans and a half-million-dollar federal environmental grant, Dinges said. “The timing on all that is up in the air,” he said. “We are working on putting all that together so we have all the projects lined up.”

Elgin

The pending agreement “is an ideal situation for residents of both communities,” Elgin City Manager Sean Stegall said. Elgin sells water to Bartlett and Sleepy Hollow at 1.25 times the rate charged to Elgin residents, which is $3.38 per 100 cubic feet, or about $4.52 per thousand gallons. That amounts to $4 million to $4.5 million per year in revenue from Bartlett and about $500,000 from Sleepy Hollow, Stegall said.

Under the pending agreement, that surcharge multiplier would be lowered to 1.15 for Bartlett when the village, which currently gets about 2 million gallons per day, hits the 2.75 million-gallon mark. That's expected to happen next year, Dinges said.

When Elgin supplies 100 percent of Bartlett's water, revenue from Bartlett roughly will double to up to $9 million per year, Stegall said.

Water revenues are used to reinvest in the water system, which must keep up with a growing population, Stegall said. Elgin hasn't yet made long-term revenue projections under the pending 35-year agreement; that will be done in conjunction with formal consideration by the city council, he said.

The extra revenue from Bartlett will mitigate the need for future water rate increases in Elgin, which has kept its rates flat since 2013, Stegall said. Short-term, it's reasonable to expect a rate increase next year, he said.

“By leveraging our significant capacity, we are able to pass along significant savings to our residents and businesses, while Bartlett residents are able to increase their use of a highly reliable, predictable and affordable commodity,” he said.

If the municipalities implement the agreement, Elgin estimates it will need to move up by five years its planned expansion of the Leo Nelson Water Treatment Plant, where a third water basin will be added to adjust to population growth, Stegall said.

The expansion, whose “rough, rough estimate” cost is $30 million, would happen in 2030 instead of 2035, according to current projections, he said.