Will DuPage towns pass on water savings to residents?

The cost for Lake Michigan water has dropped for the second consecutive year, but it's unclear whether DuPage County communities will pass those savings on to residential customers.

DuPage Water Commission officials said Tuesday the agency has reduced its rate by roughly 1 percent as part of its nearly $121 million budget for the fiscal year that started May 1. "Although it's small ... it's the right thing to do," commission General Manager John Spatz Jr. said during a presentation to the county board.

The commission provides lake water to 25 DuPage towns and some unincorporated areas.

As part of the rate cut, the amount the agency charges dropped from $4.85 per 1,000 gallons to $4.80 per 1,000 gallons. Commission Chairman Jim Zay said the decrease was possible because of hard work the group has done since being rocked by a financial scandal more than six years ago.

In late 2009, it was discovered the commission squandered its $69 million reserve fund through poor accounting practices and lackadaisical financial oversight.

After the board that oversees the commission was revamped, it implemented enhanced accounting policies, procedures, controls and oversight. It also adopted a rate schedule that addressed increases from Chicago for the purchase of water and other financial issues.

The agency also took steps to wean itself off a quarter-cent sales tax, which generates about $35 million of its annual revenue. State law calls for the sales tax to be eliminated on June 1.

To prepare for the loss of the tax, the agency has paid off all its debts, including $70 million it borrowed in the months after the financial scandal to retire construction debt and restore its reserves.

Spatz said the commission has become more efficient and reduced its operating expenditures by almost $10 million in the past five years.

He said the commission is self-sustaining and has become "a model agency."

While the commission has cut the water rate for its municipal customers, that doesn't mean those towns will lower their prices for residents.

"Each municipality sets their water rate for what they need to do," Zay said.