Prospect Heights mayor, aldermen debate selling sewer system
Prospect Heights Mayor Nick Helmer is making a last-ditch effort to sell the city's sewer system to Illinois American Water Co., but aldermen argue the switch to the private utility company will increase rates more than necessary.
The company made a pitch Monday to buy the city's sewer system for $7 million. The offer comes as officials anticipate tripling sewer bills for many residents, because the city has absorbed the defunct Old Town Sanitary District.
After state lawmakers dissolved the sanitary district in 2015, the city took over the aging system. Some residents have been paying artificially low fees, city officials say, because rates under the sanitary district didn't pay for capital improvements or proper management.
Most residents have been paying $6.50 per month. In early May, aldermen seemed to reach an informal consensus to charge residents $20 per month, with fees increasing over 10 years until rates reaching $26.50.
Meanwhile, rates would generally decrease for residents in the Prospect Heights, Wolf Mandel, Country Gardens and Pinecrest special service areas.
The special service areas have charged sewer rates based on property values. Residents in these areas have been paying roughly $300 a year, or about $25 monthly, city officials estimated.
Helmer made a plea for aldermen to change their minds, arguing the city should turn over responsibility of the sewer system to a company.
"Why in the world would we want to own a sanitary system we don't know about?" Helmer said.
Consultants have told the city the sewer system needs to be televised with cameras to determine where pipes are weak or failing.
Illinois American Water would charge residents $25.50 per month. The company offered to begin billing at a lower rate and gradually increase rates over five years with the first year of monthly bills starting at $16.50. The city would subsidize the lower rates, which would decrease its net gain of selling the system to $5.8 million from $7 million.
Opponents argue bills for residents would be cheaper if the city operates the system. During the meeting in early May, 3rd Ward Alderman Scott Williamson said residents in some cities using the private company pay up to $40 per month in sewer fees.
"That's not something I could in good conscience impose on myself or anybody else," Williamson said.
But Helmer argues controls are in place to limit rate hikes. Utility companies must receive permission from the Illinois Commerce Commission to increase rates.
The city is not a home rule community, meaning its power to levy taxes to generate revenue is very limited. If the city sold the sewer system, it would have money for infrastructure projects such as flood control, Helmer said.
"We can't fill our reserve coffers for other things we need," Helmer said.
But Williamson argued the company will find a way to make a profit.
"We could sale it for $15 million. All they're going to do is raise our rates to get the money back," he said. "It's a business. They're going to make their money - they're not going to lose it."