New agreement should stabilize water costs in Mount Prospect

For years, Mount Prospect has been at the mercy of the city of Chicago, which supplies Lake Michigan water to most of the village that it gets through the Northwest Suburban Municipal Joint Action Water Agency (JAWA).

Over a four-year period ending in 2016, water rates charged by Chicago jumped sharply, by as much as 25 percent in a single year, causing water rates in Mount Prospect to go up as much as 9.5 percent in a single year.

Those days, village officials said, have come to an end.

In August, JAWA renegotiated its agreement with Chicago, extending it another 15 years to 2032, with a cap of 5 percent on how much Chicago can increase the water rate in any given year.

"That is a real value-added provision we were able to get in the contract," Mount Prospect Village Manage Michael Cassady said. Other communities that get water from JAWA are Elk Grove Village, Hanover Park, Hoffman Estates, Rolling Meadows, Schaumburg and Streamwood.

Under the previous agreement, although JAWA's rate increases could not exceed those charged to Chicago residents, the city imposed double-digit rate increases seven times during the last decade, village officials said.

"I think it's going to moderate the rate increases going forward," Finance Director David Erb said.

JAWA also achieved the removal of minimum pumping requirements, which is significant due to declining area-wide water consumption. Otherwise, JAWA would have purchased less than the minimum volume required in the original agreement and would have been on the hook for nearly $900,000 in water in 2017 it did not use.

JAWA's success in re-upping with Chicago is having a positive fallout for JAWA's water supply contract with Mount Prospect.

Trustees this week approved a new water supply agreement with JAWA that terminates in 2058. Among the highlights was the elimination of minimum use requirements. Over the last 10 years, average water demand has declined almost 1 million gallons per day in Mount Prospect.

And under the old contract, costs for such things as the salaries of JAWA personnel were based on water consumption, while the new arrangement distributes these costs equally among the seven member communities.

The new agreement also eliminates charges based on distance from JAWA's main pumping station. Instead, these will be based on actual costs incurred and each member's water consumption.