Buffalo Grove approves 11% water and sewer rate hike

When Buffalo Grove residents receive their water bills next year, they may feel some sticker shock.

But some might also take solace in knowing that not only could it have been worse but that village officials say the upcoming rate hike will address current and long-range infrastructure needs.

On Monday, the village board approved a one-time 11% water and sewer rate increase for 2020, after which increases will settle back to the 4% annual hike that has been imposed since 2012.

When sewer and water are combined, the 2020 rate will climb from $6.37 per 1,000 gallons to $7.07 per 1,000 gallons.

Trustees also greenlighted a fixed facility fee that, for the majority of customers, will amount to $17.39 per month.

"I know that we're going to hear from some of our residents come January when they get their water bills," Trustee Joanne Johnson said. "This will be a shock to the system if they haven't been paying attention."

"This is much needed and has been proven by several major water main breaks in the recent past that we have had to fund," she added. Interim Finance Director Andrew Brown pointed out that the village staff, based on a study by consultant Strand and Associates, suggested a 37% increase. The study determined that the current rate structure would not generate the reserves needed to keep up with infrastructure needs, expected to total about $31 million between 2020 and 2024.

Revenues generated by the rate hike and the facility fee will help repay bonds issued to fund infrastructure improvements, Brown said, adding that there will be no impact on the property tax levy.

Village Manager Dane Bragg said the village will complete $145 million in water and sewer infrastructure replacements over the next 15 years. The village has earmarked $30 million for projects over the next five years.

"This proposed rate structure permits the village to move from a debt-and-cash strategy to a cash financing strategy over the long term," Bragg said.

Brown noted that Buffalo Grove has the third lowest per-thousand-gallon rate among comparable communities. With the rate increase plus the facility fee, it would move up only a couple of spots, he said.

Trustee David Weidenfeld commended the village staff for its work.

"They inherited a situation of way beyond benign neglect in which it was sort of just an abdication of responsibility to deal with this," he said.