Elgin water, sewer rates to stay flat in 2015

There will be no water or sewer rate increases next year in Elgin, contrary to what the city had anticipated.

The proposed 2015 budget for the utility fund - comprising the water and sewer funds - is $29.1 million, compared to this year's projected $29.5 million, Elgin Assistant Finance Director Debra Nawrocki told city council members Wednesday night.

Revenues come from water and sewer user fees; expenses include debt service and infrastructure improvements. The rate increase would have been between 3 percent and 4 percent, Nawrocki said.

Council members discussed how to spend down the fund's hefty reserves, estimated at almost 70 percent of expenses by the end of this year.

The staff has budgeted the money for various projects through 2018 to decrease reserves to an optimal 25 percent of expenses, Nawrocki said.

Councilman Toby Shaw suggested spending down reserves more quickly by funding more projects or lowering water rates next year.

"I would like to have a different policy where we collect what we need, and that's it," he said.

City Manager Sean Stegall said staff members can handle only a limited number of large projects in any given year.

He also pointed out that water and sewer customers, especially businesses, tend to prefer somewhat predictable rates rather than constant fluctuations.

Stegall acknowledged it's "bad financial practice" to have excessive reserves, but he also credited staff members for being conservative in their expenses.

Councilwoman Tish Powell agreed rates shouldn't fluctuate too much. The city could look at funding more sewer separation projects - making dedicated pipes for sewage and stormwater - next year, she said.

"If we can spend more money somewhere, that's certainly a place, based on concerns we've heard from residents," Powell said. Stegall said staff members would examine the idea.

The city has budgeted a total of $4.5 million for sewer separation in 2015, spread among the utility and capital improvement funds, Assistant City Manager Rick Kozal said.

Councilwoman Carol Rauschenberger, on the other hand, said she endorses conservative management of the utility fund. "Water is the most important commodity we provide, and it's also a public health issue," she said.

The city council should eventually consider enacting water conservation measures, such as charging more by the volume, Stegall said.

The city sells Fox River water to Sleepy Hollow and Bartlett. The latter currently buys 37 percent of its water from Elgin but is considering increasing that to 100 percent, Stegall said.

The city tacks on a 25 percent surcharge when selling water to other communities. "Like any other commodity supplier, the city will consider discounts for volume purchases," Kozal said.

More communities along Route 59 are expected to turn to Elgin for water supplies, as Chicago imposes limits on its sales of Lake Michigan water, Mayor David Kaptain said.

City council members on Wednesday night tabled a planned discussion regarding regulating the ride-share industry after a House committee earlier that day advanced legislation to create statewide regulations for drivers working for ride-share services.

They include modified insurance requirements, background checks and a zero-tolerance policy on drugs and alcohol.

Elgin officials - who were going to consider requiring ride-share drivers to carry commercial vehicle liability insurance - said they want to see what the state legislature decides first.

• Daily Herald news services contributed to this report.