Chicago aldermen on Wednesday unanimously approved a century-long agreement backed by outgoing Mayor Lori Lightfoot for the city to sell water to Joliet.
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Ald. Scott Waguespack, 32nd, chairman of the City Council’s Finance Committee, hailed the deal as an important agreement that would benefit not only Chicago’s bottom line and improve parkland but also would help secure water deals with other municipalities in the region.
“We’ve added Oswego, Montgomery and Yorkville and will continue to add more,” Waguespack said, referring to members of a regional commission of southwest suburban communities that also have signed on to use Chicago water.
The deal is expected to generate $24 million to $37 million in new water revenues annually, but not until 2030, when water delivery is scheduled to begin.
The arrangement — which Lightfoot’s administration made with Joliet Mayor Bob O’Dekirk, who is also outgoing after losing a bid for reelection — calls for Joliet to pay for and construct a nearly $1 billion pipeline. Joliet will honor city hiring requirements, Waguespack said, and it also will pick up the tab for $4 million in improvements to parks.
“Whether it’s the pandemic, economic development or our water supply, we know that we are better collaborating together as a region. This transaction moves forward our collaboration with northeast Illinois in a big way,” Lightfoot said in a statement. “Lake Michigan and the city’s water system is one of our most precious assets, and we are pleased to now share that with 250,000 residents of the southwest suburbs in this water supply contract with Joliet.”
Most of the pipeline infrastructure will be built in Durkin Park in the city’s 18th Ward on the South Side starting in 2025 and construction should last for two or three years, according to a city brochure. Joliet also will pay the Chicago Park District for improvements at Chicago’s Rainey, Bogan and Scottsdale parks before work starts at Durkin. Construction at the adjacent Southwest Pumping Station is slated to begin in 2024.
Ald. Derrick Curtis, 18th, spoke in favor of the deal Wednesday.
In December 2020, aldermen approved a preliminary deal with Joliet and the next month, Joliet’s City Council picked Chicago over Hammond as its source for the city’s future water needs. Aquifers in the Joliet region are drying up and water levels have dropped to depths where “costs and complications may render wells inoperable,” the Tribune reported shortly after the deal.
Chicago was a cheaper upfront option compared with Hammond, the Post-Tribune reported at the time, but one that did not give Joliet control over what rates Chicago would charge. Joliet officials expected monthly residential water bills to nearly triple by 2030, from $36 to $88, and climb up to $138 by 2040.
According to a synopsis of the deal written by the Chicago Legislative Reference Bureau, the rate Chicago will charge will be equal to the lesser of a series of formulas based on the projected costs of delivery, inflation and the previous year’s audited actual cost of delivery multiplied by 105%. Those rates will be subject to ongoing discussion by an advisory council that includes officials from Chicago, Joliet and other wholesale buyers in the region.
As part of the agreement, Chicago commits “to future implementation of the American Water Works Association cost-of-service water rate methodology for its suburban water customers,” according to the release, which “establishes water rates based upon the specific components of the supplier’s system that are ‘used and useful'” in providing water service to each consumer.
Under the terms of the 100-year agreement, Chicago and Joliet will each build certain infrastructure to connect Joliet to Chicago’s supply, with Joliet picking up the majority of the costs.
The $65 million cost of one part of the project, a tunnel extension, pump station and valve, will be funded from Chicago’s Water Fund but built by Joliet. The size of the pipeline will depend on how many other communities join with Joliet on the project.
Chicago is the state’s largest water provider and Joliet will become its second-largest customer.