Elgin balks on water rate increase

During their 2010 budget process, Elgin City Council members have pledged not to raise taxes.

So Wednesday night, it was natural for a 9 percent hike in water rates and a 51 percent overall increase from now until 2014 would raise some eyebrows.

While technically not a tax increase, council members balked at the move, which would add $3.50 a month to the typical household water bill.

"Our rates are not keeping up with expenditures," said Colleen Lavery, the city's assistant finance director.

City water usage has dropped in recent years and two revenue sources - connection fees from new homes and interest income - that have been used to keep water rates low have dried up.

City officials estimate that some 1,200 households have not been built since the recession began.

That, coupled with lower usage and repaying some $16 million in improvements for the city's Airlite Street water treatment plant, makes increases needed to help repay loans.

Councilman David Kaptain said that while electricity and chemical costs have gone up, the biggest reason for the rate increase was repaying debt for development that has stalled.

"Existing residents are paying for something that's not there," he said.

Council members asked staff to go back and see if a rate increase could be avoided - or at least softened.

Mayor Ed Schock said the city should look at a rate structure that is "less punitive" and that separates "need from want."

"We shouldn't put the burden on all water users," he said.

City Manager Sean Stegall said some municipalities charge significantly higher water rates at peak times or at times to discourage inefficient water use, such as sprinkling on a 100-degree day at 2 p.m. when most of the water would simply evaporate.

One solution is smart water meters that charge different rates at different times and perhaps that could be on the horizon for Elgin.

"It is some time to turn that ship around," he said.

The council will resume talks on their $277 million spending plan at 5 p.m. Dec. 2 at city hall, 150 Dexter Court.