Elgin mayor proposes using $6M in discretionary funds to lessen lead pipe replacement debt

As Elgin prepares to vote on its annual budget next week, Mayor David Kaptain has suggested the city take $6 million set aside for discretionary funding over the next three years and put it toward its lead service line replacement program.

Kaptain said the move would save the city $1 million in interest over the next five years.

"It's a pretty significant amount of money," Kaptain said of the savings. "It also sends a message to the community that we take this extremely seriously, and we want to make sure that the health and safety of our residents is paramount for us."

The city has been replacing lead service lines using $13.5 million from the American Rescue Plan Act and voted Wednesday to approve accepting a $2 million loan from the Illinois Environmental Protection Agency. The city planned to sell $20 million in general obligation bonds next year for the program, but Kaptain's proposal would drop that down to $14 million.

Kaptain said the state and federal government are in the process of accelerating the timeline for lead pipe replacement, shortening Elgin's deadline from 14 years to 10.

"That puts our costs up pretty significantly," he said.

City manager Rick Kozal said last week that the city has to issue the $20 million in bonds to meet its requirements with the IEPA.

"It's simply a question of whether we want to reduce that borrowing or continue having that $6 million for other initiatives," he said. "There's truly no right or wrong answer. It's a straight policy consideration."

While none of the city council members objected to the total amount being spent on the lead line replacement program, some wondered if using the discretionary money would limit them from doing other things over the next few years, such as a new grant program for homeowners in the city's historic districts.

"I have to push back a little," council member John Steffen said. "I mean this $6 million is not just sitting there and not programmed. I think it was planned to do some things with that."

After much back and forth, including a proposal to split the money with $5 million toward the lead pipe replacement and $1 million left over for discretionary spending, council member Corey Dixon suggested tabling the issue until the Dec. 20 meeting, the same day the council is scheduled to vote on the final budget.

"We can continue to have this conversation, but I promise you if we take a couple of weeks just to think about it we'll be a lot more clear," Dixon said.

The motion to table passed 5-4 with votes from Dixon, Steffen, Dustin Good, Carol Rauschenberger and Tish Powell.