Elgin eyes water and sewer upgrades, housing for homeless with federal relief funds

Elgin officials are considering the best way to use the city's share of federal American Rescue Plan Act money.

City Manager Rick Kozal shared a proposal with the Elgin City Council last week that would put most of the $19.5 million toward a $135 million undertaking to replace the city's lead water pipes, which he called "a non-sexy but essential infrastructure project."

The city will receive its share of the American Rescue Plan Act, the $1.9 trillion economic stimulus bill approved by Congress and signed into law by President Joe Biden in March, over two years. It can be used in four general funding categories.

Kozal said two of those categories, replacing lost public sector revenue and premium pay for essential workers, were eliminated from consideration because the city was able to maintain a balanced budget through cutbacks and because for city of Elgin employees, "there's a recognition that part of our responsibility is to go above and beyond."

A relief fund allowance for investments in water, sewer and broadband infrastructure fits the city's need to replace lead pipes and aligned with a pair of community surveys that showed water and sewer infrastructure atop the list of issues of importance to residents.

"We have an opportunity to take a bite out of that $135 million bill, and that's why I continue advocating that course of action," Kozal said.

With 13,500 lead water service lines that need to be replaced, Kozal said Elgin is behind only Chicago's 40,000 in Illinois. The state has mandated the city remove them within 27 years.

The city also has a state mandate to separate storm and sanitary sewer lines, which will cost about $90 million. The city is devoting about $3 million a year toward that project.

Kozal said the only revenue source to cover the combined $225 million cost is a utility fee.

Using the federal relief money "is what keeps the water bills down," Kozal said. "This is what keeps the property taxes from going up."

While the majority of the $19.5 million would be spent on the lead pipe project, Kozal and the city staff also recommended a plan to shuffle some money around for a project that would happen above ground, where residents could see.

That plan could turn the Eastside Recreation Center into permanent supportive housing for the city's homeless while also adding improvements to the Elgin Sports Complex.

The connection between the multiple issues is where it gets a little confusing.

Because American Rescue Plan Act money comes with limitations, the city would take the roughly $6 million over two years it spends on sewer separation and use the federal funds to replace that money.

The money from the capital fund would then cover most of the projected $7 million cost of adding two lighted, artificial turf fields and knocking down a pair of buildings on the east side of the sports complex property to build a road, making the complex accessible from Route 31.

What does that have to do with creating a resource hub and supportive housing for the homeless at the Eastside Recreation Center? That development was funded in part by a grant from the Illinois Department of Natural Resources, which requires the city to offset the services lost if it were to turn the rec center to a different use.

IDNR would have to approve the plan, which Kozal said would attract more visitors to the sports complex and provide them with more direct access to downtown.

The city will introduce its 2022 budget and three-year financial plan at the beginning of November.