Buffalo Grove staff says 37% water rate hike may be best option

Buffalo Grove trustees are finding it a challenge coming to grips with the solutions on the table for addressing the village's financial needs as it deals with aging infrastructure.

For the water and sewer system alone, the village staff is suggesting a 37% rate hike.

"People are going to hear about property tax, water tax, gas tax, expenses, salaries. I'm worried people are going to come here and burn down the village hall," said Trustee Gregory Pike, who is in his first year on the board.

Monday's committee of the whole meeting featured a smorgasbord of possible financial prescriptions, but the one that is likely to be the hardest to swallow for residents is the proposed hike for water and sewer fees.

Village officials said current rates cannot generate the reserve needed to keep pace with anticipated replacement and improvement projects.

A recent report from Strand Associates put that cost at $31.6 million over the next five years and $152 million by 2038. With the current rate structure, the village will fall short by $54 million.

Andrew Brown, interim director of finance, said one option in the short term is selling bonds to finance the work, but that would likely cost $11.1 million in interest over a 15-year payback period.

What the village staff is recommending is increasing the water rates from $6.37 per 1,000 gallons to $8.77 next year, a 37% increase, followed by lower increases in following years before the village drops back to 4% increases in 2025.

On top of that, the staff is proposing a new flat fee of $9.26 for water and $8.13 for sewer.

For 23 years through 2005, the village maintained a water and sewer rate of $1.80 per 1,000 gallons. The village benefited from minimal capital expenses, building and development fees, and growing consumption.

But since 2003, consumption has declined 25% to about 1.2 billion gallons in 2018. And maintenance needs continue to grow, with $18.7 million spent on infrastructure repairs and improvements since 2012.

Village President Beverly Sussman asked Brown whether there could be a lower rate hike.

"We have options. This isn't set in stone," Brown said. "But the less you start with, it has a compounding effect out into the future."

Trustees found the numbers daunting.

"Say you are going to go up 37% in one year on one bill. That's a lot," Trustee Joanne Johnson said. "That's a huge increase for people on a fixed income."

But Trustee David Weidenfeld suggested the village has to make the tough call.

"Be honest and say, look, this village behaved just like the state of Illinois and for 25 years kicked the can down the road and did nothing," he said. "Unfortunately for us, we have a choice. We can either be really unpopular or we can kick the can and make it worse. And so as painful and as awful and as terrible as it all is, we have to go do something, whether it's debt or whether it's rates or it's some version."

Article Comments
Guidelines: Keep it civil and on topic; no profanity, vulgarity, slurs or personal attacks. People who harass others or joke about tragedies will be blocked. If a comment violates these standards or our terms of service, click the "flag" link in the lower-right corner of the comment box. To find our more, read our FAQ.