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Lake Zurich Water Bills Will Rise

Rate increase necessary to improve aging infrastructure, but trustees question water fund’s history.

 

The Lake Zurich village board approved a water rate increase of 15 percent, at Monday night’s village board meeting.

The rate increase was necessary because water and sewer fund revenue does not cover expenses and the fund is struggling to keep up with an aging infrastructure, according to Finance Director Jodie Andrew.

Residents’ water rates will increase by 7.4 percent on May 1, 2013, and another 8 percent on May 1, 2014.

Andrew said the average household of four, using 8,000 gallons of water per month, will see an increase of $6.88 per month this year.

The water rates were increased by 25 percent last January. At that time, the village considered raising the rates even higher and tentatively agreed to a rate increase for August. However, the increase was postponed to allow the new finance director (Andrew) and new auditors time to conduct a thorough review of the water and sewer fund.

During the Capital Improvement Plan (CIP), village staff divided water projects into critical and necessary. Funding both would require another 25 percent increase as well as significant bond issuance. Funding only critical expenses requires a 15 percent increase and a smaller bond issuance. Read the entire analysis of water rate increases. 

During public comment at the beginning of the meeting, three residents—Bill Leahy, Mike Vujica and Jim Tarbet—urged the village board not to raise water rates.

Vujica wondered how the fund was running a significant surplus in recent years which turned into a deficit. He questioned numerous transfers from the water and sewer fund to the general fund in the mid-2000s. Tarbet argued that the rate increase isn’t necessary because there are expenses being charged to the water and sewer fund that belong elsewhere. 

Trustees Tom Poynton and Rich Sustich also questioned the history of the water fund and previous transfers out of the fund. 

Sustich noted that data showed the ending working capital in the water and sewer fund in Fiscal Year 2010 was $2.34 million.

He said when Andrew was hired as finance director she discovered serious discrepancies in the numbers.

“The bulk of it appears to be more of an accounting error more than anything else,” Sustich said.

Poynton said the discrepancy in the numbers has not been fully explained. He said the board doesn’t want to raise water rates, but the funds are necessary for critical projects.

“I apologize for the clerical error, but it was way before any of us got on the board,” Poynton said.  

Poynton also noted that, in past years, the village allowed transfers of $500,000 from the water and sewer fund to the general fund that apparently were never replaced. 

Andrew said the practice of transferring funds from water and sewer to the general fund is common among municipalities, however the transfers should be logical.

The village’s current board stopped the practice of transferring funds from sewer and water to general fund. 

“I cannot speak to the past of the water and sewer fund. Next year we are taking a close look at what costs are being charged and are expecting a significant reduction in the administration charged to the fund. We are taking a closer look to be sure what is being charged is appropriate,” Andrew said. 

 

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Really February 08, 2013 at 07:16 PM
Really? A 15 percent increase, no required reduction in ridiculous adminstrative and operating expense at the same time, no clue what is behind those expenses, no idea how we could afford to move funds from water to the general fund historically, and no interest in the expressed concerns from residents and nothing but trustee's smiling faces in the picture with another article. This is a terrible failure, what are you so happy about? Who is satisfied with being 6th compared to nearby communities. We should set the bar higher and expect more. How about, cut administrative and operating expenses and reduce the water rates to be in the top 3 (under $5/1000 gallons) lowest at least! Then you at least give the appearance of doing some due diligence or having accountability if rate needs to be increased. You could also increase the rates at a much slower pace. This is crazy, what are you thinking? This board is out of touch.
John February 10, 2013 at 07:30 PM
More burden on those living within the borders of LZ. Thanks for further burdening those loved ones living on a fixed income. This town just continues to falter and it has been pervaded with greed and guttony. Accounting error? Really? This is downright criminal if you ask me.
Say it isn't so February 11, 2013 at 08:45 AM
So we just have to take it? Not even a call to Lisa Madigan?
Disgruntled February 11, 2013 at 11:42 PM
Show up, ask questions & demand answers! Haven't you taken this stuff long enough?

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