DuPage water rates ready to climb

The price of water is going up in most DuPage County towns — an increase expected to continue for the next few years.

Members of the DuPage Water Commission on Thursday night approved a 10 percent rate hike as part the agency’s roughly $87 million budget for the upcoming fiscal year, which starts May 1.

The commission is responsible for supplying more than two dozen DuPage municipalities and agencies with Lake Michigan water. With the rate increase, the cost the agency charges for water will be $2.29 per 1,000 gallons.

Even with the change, officials acknowledge the commission will need to boost rates further in future years to pay down its outstanding debt. The agency also must wean itself off a quarter-cent sales tax that’s mandated by the state for elimination by 2016.

Commissioner Phil Suess said the inevitable elimination of the sales tax is significant because it generates about $31 million of the agency’s annual revenues. Meanwhile, the commission collects about $58 million from its water sales.

“The sales tax has been subsidizing the purchase of the water,” said Suess, also a Wheaton city councilman. “We basically have four years to come up with a plan for how we’re going to replace that.”

State lawmakers decided to take away the sales tax when they revamped the water commission. That overhaul came after the agency accidentally spent its $69 million reserve fund through poor accounting practices and lackadaisical financial oversight.

“Knowing that you are going to lose sales tax in 2016, you have to start positioning yourself to where you are floating strictly on water sales,” said John F. Spatz Jr., the commission’s general manager.

In order to replace the sales tax, officials estimate the water commission would need to increase its rate by about $1 per 1,000 gallons. To reach that point gradually over multiple years, the commission would need to boost the rate by 10 percent or more each year. That doesn’t include the possibility of Chicago increasing the rate it charges the water commission.

Despite the likelihood of future increases, Spatz said the commission’s rate is reasonable compared to the price of water in other major metropolitan areas nationwide. “It’s among the lowest in the country,” he said.