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Government

Elmhurst expected to raise water, sewer rates

Elmhurst alderman Kevin York, chairman of the city's Finance, Council Affairs and Administrative Services Committee, comments at the Dec. 18 City Council meeting on a committee report the council unanimously passed later in the meeting.
Elmhurst alderman Kevin York, chairman of the city's Finance, Council Affairs and Administrative Services Committee, comments at the Dec. 18 City Council meeting on a committee report the council unanimously passed later in the meeting.

ELMHURST – Elmhurst residents will likely start paying more for city water and sewage services in 2018 to fund capital projects and build cash reserves.

The Elmhurst City Council unanimously approved a committee report at its Dec. 18 meeting recommending the city attorney prepare an amendment to the Municipal Code of Ordinances to increase the water and sewer rates, along with the capital investment recovery charge, effective Jan. 2, 2018.

For the average four-person household, the water rate would increase 3 percent, the sewer rate would increase 2 percent and the capital investment recovery charge rate would increase 45 percent, resulting in a 6.6-percent overall increase – an average $120.19 per month for water and sewer services in 2018 compared to $112.72 in 2017, according to the report.

Alderman Kevin York, chairman of the city's Finance, Council Affairs and Administrative Services Committee, presented the report at the meeting and said the city's municipal utility fund is "struggling" and the city has the "fiduciary responsibility" to make decisions to get the fund within prescribed ranges.

"We're doing our job," he said. "Our job isn't always giving people ice cream and puppies. This is a responsible decision and one that's not easy, but it has to be done."

Alderman Michael Bram said the increased rate was "significant" and asked if there could be a smaller increment raise in rates over a longer period of time, but York said it was a matter of equity.

"If we were to do something like that, that means that today's users would be paying less than what it really costs to operate the system. If they lived here for a year and did that and then they moved out, they would have gotten out without paying their fair share," York said.

Following a 2013 water and sewer rate study, the City Council approved policies to establish a minimum cash balance goal of 25 percent of annual operating costs, eliminate the minimum user charge of 3 cubic meters of water and sewer use, and establish a capital investment recovery charge, based on water meter size, to recover annual debt service costs for capital investments, according to the report.

With the city's need to build cash reserves for the municipal utility fund and fund increasing levels of annual watermain replacement and other operating expenses, the city would employ an overall water rate increase of 3 percent for residents and an overall increase of 3.3 percent for commercial customers.

With an increase in capital costs related to sanitary sewer collection and treatment, an increase in sanitary sewer replacement costs of $2 million annually in operating costs that are not financed by debt and more than $10 million of other capital projects – some of which will be funded through loans from the Illinois Environmental Protection Agency – the projected utility fund cash balance for sewers at the end of 2017 is below the cash balance goal of $1.6 million, so the city would increase the sewer service rate by 2 percent, from $6.82 per thousand gallons to $6.96 per thousand gallons for 2018, the report stated.

The capital investment recovery charge provides a stable revenue source for the city independent of water consumption amounts so the city can pay off annual debt service on capital expenditures, such as maintenance and improvements on water distribution and sewage collection and treatment services, the report stated. The city expects debt service costs to be higher in 2019 compared to 2018 because an additional $14 million of debt will be incurred for capital projects for the water and wastewater systems, the report stated. Capital investment recovery charge rates for 2018 would increase 45 percent following the City Council's approval of the amendment.

York said he expects the rate increases will be similar in 2019 and then there may be some "flattening" of rates. Though costs are expected to increase over time, the rate at which they increase is expected to decline because of capital improvements and efficiency, and the municipal utility fund is expected to achieve the 25 percent cash balance goal in 2023, the report stated.

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Proposed rate increases

Water: $5.33 to $5.64 for residents and $10.48 to $10.99 for commercial use per 1,000 gallons of water

Sewer: $6.82 to $6.96 per 1,000 gallons of water

Capital investment: $10.54 to $15.31 monthly for meters up to 1 inch, $21.06 to $30.57 for 1.5-inch meters, $33.69 to $48.89 for 2-inch meters, $67.42 to $97.85 for 3-inch meters, $105.34 to $152.89 for 4-inch meters, $210.68 to $305.76 for 6-inch meters

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