Water, Sewer Hike Could Take Effect In September

's water and sewer rates could be on the rise as soon as late September.

Trustees held a special meeting Monday night to discuss with village staff a consultant's recommendation that the board raise water and sewer rates. Village officials hired engineering consultants Baxter and Woodman of Illinois to audit the water and sewer fund. The firm presented its findings to the village board Aug. 1.

At the Aug. 1 meeting, a Baxter and Woodman representative said the water and sewer fund has a cash balance of $1.9 million, and that amount continues to fall. She recommended that the village save about $2 million annually for the water and sewer fund to cover future expenditures.

"I guess our biggest concern is getting to a juncture where the board feels comfortable," said Village Administrator Bob Vitas. "We know that going forward and doing nothing is not the best option for the village's water and sewer fund."

At Monday night's meeting, Vitas, Public Works Director David Heyden and Finance Director Al Zochowski discussed the Baxter study and two other documents: the Maximus cost allocation study and the Ruckert/Mielke sanitary sewer and water rate study. Other documents provided a series of possible plans to raise the water and sewer rates.

The potential plans call for varying increases to the existing rates, which are $3.58/1,000 gallons for water and $2.46/1,000 gallons for sewer. Plan B, for example, would see a 40.6 percent rate increase — to $4.54 for water and $3.95 for sewer — the first year, followed by 5.1 percent, 2.7 percent and 1.6 percent the subsequent years.

Another plan calls for a 24.8 percent increase the first year, followed by 5.7 percent, 3.0 percent and 1.8 percent increases the subsequent years.

Vitas said the reason for the bigger percentage bump in those first years is to get the water and sewer fund back into a stable situation. He said that while maintenance and improvement costs have stayed the same, consumption has dropped. That has happened for many reasons, Vitas said, including water conservation, vacant homes and the economic downturn in general.

"So essentially we're caught between a rock and a hard place," said Trustee Tom Poynton, noting that people are told to conserve water but that then affects village revenue.

"People aren't drinking less water — they're just getting it from a different source," he added, referring to people buying more bottled water.

Vitas said part of the village's downfall was that the board was not asked to increase water and sewer rates over the years. The last increase took place in 2004, when the rates jumped by about 40 percent. Had the rates been adjusted over the past six years, the potential increase would not be as drastic as is now being considered, said Vitas.

What ultimately will affect the selected rate increase, Vitas said, is the amount of money the board agrees to set aside for future projects and maintenance based on depreciation of the water and sewer system.

"The more aggressive the depreciation schedule, the greater the effect on the rate," said Vitas.

Heyden said the amount of reserves needed is tough to predict. The Ruckert/Mielke study recommended saving $600,000 annually, while the Baxter study recommended $2 million. Heyden said that while there are occasional water main breaks, "Our system's not in that bad of shape."

"I strongly believe in planning for the future," said Trustee Jeffrey Halen. He suggested village officials "dig deeper into the depreciation tables to make sure we have the right numbers."

Vitas said the plan now is to seek an update to the Mielke study, which could cost about $5,000. That study was completed two years ago. The update will address, in part, the depreciation/savings schedule. Vitas said the updated study could take two to four weeks. Vitas said a water and sewer rate adjustment could then take place in late September.