Village of Oak Park water and sewer rates are increasing to help raise revenues that are falling behind expenditures, but the village board and staff are working on a new approach to pricing water use.
The village board voted 6-1 at its meeting on Sept. 15, to move forward with an alternative rate structure for the next five years that creates two-tiers for water usage and billing instead of the flat-rate system that has been in place traditionally.
The water and sewer fund covers the cost of water, operating expenses and pay-as-you-go capital improvement projects as well as a portion going to the debt service of the village’s larger planned capital projects. Water is purchased from the City of Chicago and rates are increased each year with this year’s rate going up 1.85% and last year by 4%.
“If the board were to choose to do nothing and maintain the 2026 rates as they stand now, the water and sewer fund would become over time insolvent,” said Public Works Director Rob Sproule. “The board needs to take some sort of action.”
The structure that was chosen at the meeting creates two tiers of usage per water connection and fiscal quarter with 10,000 gallons being the line of demarcation between lower and higher levels of use. According to the data presented at the meeting by NewGen Strategies & Solutions, about 40% of residential bills currently fall within Tier 1, or below 10,000.
The first 10,000 gallons will be charged on a rate that increases at a consistent 2% each year for the next five years. Tier 2, above 10,000 gallons, will be charged at a higher cost with fluctuating increases between 6-7%.
“I think that having that dividing line at 10,000 gallons makes some sense because it really does address sort of that that average user and it creates opportunities for savings through sustainability efforts, through native planting, through things that can ultimately save water, and for most people, will mean that their rate of growth, their water bill, is below inflation,” said Trustee Brian Straw.
To put it into actual numbers, the 2027 cost per thousand gallons of water is $12.18 for Tier 1 and $12.79 for Tier 2. Looking ahead to 2031, the cost would be $13.18 for Tier 1 and $16.37 for Tier 2.
Trustee James Taglia was the only opposing vote arguing to maintain the current flat-rate system with consistent price increases across all users.
“I don’t understand why we are focusing on a new mechanism,” said Taglia. “I feel like we tinker a lot of times and we try to find some new way to solve a problem that we really don’t understand, and I think I just feel like that’s not the way we’ve done it for 100 years. It’s a valid way, and it yields a similar outcome.”
There were some concerns over how the tiered system would impact multi-unit residents as bills are issued through a single water connection, not per dwelling. This means that apartments will quickly move into Tier 2 at the higher rate for the combined water usage of all units in the building, however, it is projected that all of the rate increase models would yield similar prices.
“Regardless of the alternative model that you pick, the impact difference between the three of them on multifamily properties per quarter is relatively small,” said Sproule.
The presentation used a hypothetical example of a 10-unit building for estimates across all three rate structures presented. Under the system chosen, it would only cause about a $1 increase per unit in comparison to a flat-rate system.
Mitch Bowlin, director of business operations for the Park District of Oak Park, shared concerns during public comment that the new system would cause too much of an increase for the high-usage services like pools. He shared park district impact estimates of up to $15,000 in the first year and $80,000 by 2030.
“The park district has long been committed to environmental stewardship. While we support water conservation, the proposed rate structure will force us to evaluate service reductions to manage increased costs,” said Bowlin.
Erin Duffy, deputy director of public works for the village, shared that the village looked into their own estimates for the park district and “we weren’t quite projecting the increase that they were describing.”
Trustee Cory Wesley also shared his opinion that it is the responsibility of the park district to find ways to raise revenue to cover the cost of their water usage instead of raising residential rates to cover the difference.
“The people at home, the entire village, shouldn’t have to pay more for pool water,” said Wesley.
With the new system now chosen by the board, village staff will now work to prepare an ordinance amendment before the new rates actually go into effect.