Get ready for 70% water rate hike if Emanuel gets his way
If Chicago Mayor Rahm Emanuel gets his way, many suburban families will soon pay 70 percent more for their water.
Under the new mayor's first budget proposal, Emanuel is calling for a 25 percent hike next year in water rates and 15 percent each of the following three years to help cover the cost of the city's aging water and sewer infrastructure.
But if the city council approves the hike, that also means suburbs that receive Lake Michigan from Chicago -- like most of DuPage County and many suburbs in Northwest Cook County -- will also see the rate hike.
"We had heard rumblings that Chicago is looking at raising rates, but I always kind of thought in the neighborhood of 10 percent or so," said Jim Holzapfel, Naperville's director of water and wastewater. "This is a bit surprising."
Emanuel's plan won't affect towns like Arlington Heights, Buffalo Grove, Palatine and Wheeling, because those communities have water pumped to them from Evanston's system.
But for Naperville and nearly two dozen other municipalities that receive drinking water from Chicago through the DuPage Water Commission, there will be an impact. The Northwest Suburban Municipal Joint Action Water Authority distributes water to Schaumburg, Hoffman Estates, Hanover Park, Elk Grove Village, Mount Prospect, Streamwood and Rolling Meadows from Chicago as well. Those communities will also have to adjust.
"It means our operating costs are going to increase substantially," said Joe Fennell, the Northwest suburban authority's executive director.
But it likely means even more substantial increases in DuPage County. Here's why: Chicago sells water at a rate of $2.01 per 1,000 gallons. The DuPage Water Commission sells it to its member communities for $2.30 per 1,000 gallons, with the markup covering the agency's debt and operational costs. Then the municipalities tack on additional costs to cover their operational and capital needs.
By the time it comes out of a homeowner's faucet in Naperville, the price has risen to $3.18 for every 1,000 gallons. And that's pretty cheap, comparatively. In Oakbrook Terrace, residents are charged $7.14 per 1,000 gallons.
Holzapfel said the current average monthly residential water bill in Naperville is $36.80, which roughly translates to about 11,600 gallons of water a month.
Combined with Chicago's planned 70 percent hike over the next four years and Naperville's own 12 percent hike during that same period, Naperville residents are looking at an 82 percent increase by 2016. But that's not all. Because the previous water commission administration mismanaged the agency's money by accidentally spending its $69 million reserve fund, part of the legislation that was passed to make the agency more accountable requires a quarter-cent sales tax the commission receives to expire in 2016. Without the $30 million in annual revenue that sales tax generates, the commission will have to raise rates to make up for its loss. Holzapfel estimated that would be another 10 percent hike in water rates.
That means the same family that's paying $36.80 a month for water will be paying closer to $70 for the same amount of water in four years.
DuPage County Board Chairman Dan Cronin, who championed the legislation as a state senator to repeal the commission's sales tax, said the tax should still be repealed.
"This policy of using sales tax revenue to subsidize water rates is irresponsible," he said. "We're giving taxpayers a break here. I enthusiastically embrace the policy I fought for in Springfield. The fact that Rahm wants to raise rates 70 percent doesn't please me, but we want accountability at that commission."
Currently, the water commission pays the city of Chicago about $60 million a year for Lake Michigan water. If Emanuel's plan is approved, in four years that same amount of water will cost about $102 million.
John Spatz, Executive Director of the DuPage Water Commission, said the agency can usually hold off immediately instituting rate increases from Chicago, but not at the level Emanuel's talking about.
"It will be something we have to act upon immediately," he said. "The initial number is what might catch a couple people by surprise."
But Spatz was not caught off guard by Emanuel's announcement. Spatz is a new arrival at the water commission, taking the reins of the scandal-plagued agency less than a year ago. He is a former Chicago Water Management Department commissioner and is fully aware of the city's crumbling water distribution infrastructure.
"It's at the end of it's useful life," he said.
A significant portion of the city's water infrastructure was built between 1890 and 1930, he said. During that time roughly 3,000 miles of pipes were laid throughout the city as it grew, Spatz estimated. As it ages, it leaks. That's not only a waste of a resource, but it wastes energy by pumping water that may not reach its destination.
"We have to be good stewards of the Great Lakes," Spatz said. "By replacing pipes, you're saving water and money."