Water / Sewer Rate Update
In 2008, as part of the planning for our new $35 million wastewater treatment plant, the Village conducted a detailed study and implemented its current water/sewer rate structure. The adopted rates were based on best available data at that time including water usage, future growth projections, debt obligations and projected operating costs. In 2012, when significant rate increases from the City of Chicago were passed along through the DuPage Water Commission, the Village adjusted its rates accordingly, publishing its current 2012-2016 structure to reflect the increased supply costs.
Our new treatment plant also came online in 2012, and after a full year of operating expenses, an updated rate study was conducted in 2013-14. It was determined that key assumptions from the initial 2008 rate study, in particular the projected water usage, varied significantly.
Water conservation efforts, coupled with the economic downturn that negatively impacted growth projections, resulted in actual 2013-14 water usage being 19% less than 2006 usage, and 24% less than the 2008 projections used to develop the current rate structure (see graph). This has resulted in an annual revenue shortfall of $1.4 million less than projections these past 2 years. A survey of other DuPage County municipalities revealed that many other towns are struggling with similar water usage drops the past 5 years.
The costs to operate the water and sewer system have matched the 2008 projections fairly well, so this required revenue must be distributed over a smaller volume of water usage. The recent revenue deficits have resulted in the fund balance reaching uncomfortably low levels, and must be addressed. The Village Board has studied this matter very carefully, and is reluctantly yet proactively taking a measured approach to closing this revenue gap over the next few years by implementing modest increases over the previously published rates.
Starting January 1, 2015, water and sewer rates will increase 2.5% over the previously published rates. The Village has also committed to conducting detailed annual reviews of water usage and system operating costs in order to assess the need for future adjustments. Currently projected rates through 2018 are shown in the chart above, and reflect the best available data and projections through August 2014.