Des Plaines will likely increase water and sewer rates this year to keep up with maintenance costs and address Chicago water rate increases.
For residents this would mean a 21.23 percent rate increase. For average users, there will be a $6.55 monthly rate increase, or $13.10 on the city’s bi-monthly bills.
Alderman voted to pass the ordinance in a 7-1 vote on first reading at the city council meeting on Tuesday. Fifth Ward Alderman Jim Brookman voted against the measure.
A final decision will happen at the ordinance's second reading. All ordinances have two readings, and council members vote on both. The purpose of the first reading is to put people on notice of the subject matter of the ordinance. It is adopted or defeated at the second reading.
If approved at the second reading at city council’s next meeting on Feb. 6, the increased rate would go into effect retroactively as of Jan. 1. Residents would see the increase on their March or April bills, depending on their billing cycle.
The rate increases stem from two pressing issues, city staff told council members: Chicago water rate increases and Des Plaines’ growing operating and maintenance debts and costs.
Des Plaines purchases water from the City of Chicago, which upped rates 25 percent for 2012. This is the fourth time since 2005 the rates have gone up. Dorothy Wisniewski, director of finance, said Des Plaines has not increased its rates since 2006.
Water and sewer rates are composed of two parts: the purchase cost of the water and the operation and maintenance cost.
The 21.23 percent rate increase for consumers is a combination of 15 percent increase in operation and maintenance cost and the 25 percent increase in the purchase cost of Chicago water.
“This rate increase was forced down our throats with no input from the suburbs,” Mayor Martin Moylan said, referring to the cost increase from Chicago.
The Des Plaines’ water and sewer fund, which covers maintenance and operating costs, will be in the red at the beginning of 2013 without rate hikes, Wisniewski said.
For the past three years, the fund has been running in a deficit position of $2 million a year, she added.
Now the city must pass a stopgap measure to cover costs. It would be irresponsible to pull from the already strained general fund, Wisniewski said.
Rate study completed in the fall
In October a consulting firm, Baxter & Woodman, studied Des Plaines’ water and sewer rates, and presented three scenarios for the city to choose from for increasing the rate.
The firm recommended the third option — a 30 percent increase — the most aggressive in terms of addressing the fund deficit and infrastructure improvements.
Tim Oakley, director of , said half the city’s water mains were about 50 years old, and about 10 to 15 percent of the city’s mains were 75 years old, the lifespan of a water main.
Aldermen and city staff members were onboard with the 30 percent increase until they learned of Chicago’s rate hikes, Wisniewski said. She said they are now choosing a scaled-back version, the first option from the report, to ease costs to residents stemming from the increase of the purchase price of Chicago’s water.
“It is unrealistic for residents to take in these costs,” Wisniewski said of the third option.
Wisniewski said the current plan addresses making sure the city’s water and sewer fund is no longer in the red by the first quarter of 2013.
Alderman asked why revenue generated from the casino couldn’t be used to cover these costs. Seventh Ward Alderman Dan Wilson said he eventually wanted casino revenues to pay for updates to the city’s infrastructure.
The city will not be able to spend revenues received from the casino until 2013.