River Forest’s water bills will be rising significantly over the next few months as the village board responds to recent steep rate hikes by the City of Chicago. The city, which sells the village its water, announced cost increases of 15, 15 and 14 percent over the next three years.
River Forest, in turn, will raise its rates 20 percent-$0.61 per 100 cubic feet-over the next four months, and a total of 44 percent by 2011. The current rate is $3.05 per 100 cubic feet (748 gallons) of water. That will rise to $3.66 by May 1 and to $4.31 by 2011.
Monday night Public Works Director Greg Kramer and Village Administrator Steve Gutierrez reviewed the village’s water and sewer program at a Village Finance and Administration Committee meeting prior to Monday’s board meeting.
The overall dollar amount increase is $120,000.
Kramer said 12 percent of the increase would cover the Chicago hike, while the remaining 8 percent would go toward funding major water system projects as well as covering inflation.
In addition to the Chicago rate increases, River Forest needs to issue a $1.4 million bond for water main and related street improvements. That work entails water main replacements for the River Oaks-Auvergne Place subdivision, as well as replacing antiquated 4-inch water mains under Lathrop Avenue between Lake Street and Chicago Avenue. The River Oaks project is estimated to cost $250,000, while the Lathrop Avenue project will cost $550,000.
Kramer said there are also plans to replace the remaining old-style water meters with units able to be read from a distance by radio technology. That upgrade, expected to cost $620,000, will negate the need to walk meter routes, which Kramer said is the single most costly component of the current meter reading process.
“That bond issue, which will carry an annual debt service of $173,000, will represent $0.25 of the $0.61 increase in 2008.
“We’ve strived very hard to keep our water rates as low as possible,” said Kramer.
Kramer noted that while Chicago increased its rate 15 percent on Jan. 1, River Forest’s budget year doesn’t start until May 1. That gap will produce a $31,000 shortfall if not addressed. When Village Administrator Steve Gutierrez suggested the board could approve a “staged” ordinance that raises rates over the next several months, committee member Patrick O’Brien urged the board to act now rather than later.
“Given that rates are increasing 44 percent over the next three years, it’s not prudent to delay the increase,” he said. “I think we better bite the bullet, and bite it earlier rather than later.”
While not discussed in the finance committee meeting Monday, the shift of some improvement costs from the general fund to the water and sewer fund represents a change in practice.
“With increasing costs and declining revenues in the general fund, we are recommending increasing the water fund contribution to street improvements,” Gutierrez wrote in a Jan. 11 memo to the village board.
Finance committe Chair Steve Hoke expressed concern about that shift Tuesday, calling it an “attempt to shift street improvement costs normally paid for by the General Fund, paid for by property taxes, to the resident’s water bill.”
“In effect, it’s a tax hike,” said Hoke.
The finance committee will take up the water rate issue again at a meeting prior to the regular village board meeting on Jan. 28.