The Oswego Village Board may raise water and sewer rates coming up rather than wait a few years as part of measures to help pay for the village’s transition to Lake Michigan water with a connection through the DuPage Water Commission.
The village’s consultants Baxter & Woodman recently presented a preliminary rate study to the board.
The analysis projected water and sewer rates going up beginning May 1, 2024, Baxter & Woodman engineer Alexis Shotton said.
The village board adjusted water rates in 2017 for fiscal years 2018 to 2022 based on a 2016 study. Trustees then re-evaluated the rates in 2019 and lowered them based on the water and sewer fund having a healthy reserve, village officials said.
There has not been a rate increase since May 1, 2022, Oswego Public Works Director Jennifer Hughes said in her report to trustees.
The village received authorization Aug. 10 for a Lake Michigan Water Allocation Permit from the Illinois Department of Natural Resources to begin receiving Lake Michigan water in 2027, village officials said.
Oswego, Yorkville and Montgomery decided in mid-December 2021 to change from relying on well water to Lake Michigan water. The Illinois State Water Survey has used projections showing the region could run out of ground water from the aquifer it uses in the next 20 to 40 years.
Trustee Kit Kuhrt suggested the village take a serious look at increasing water and sewer rates this year rather than later to help build the reserve fund and pay down the debt service for the move to Lake Michigan water.
“We need to really start moving faster,” Kuhrt said. “I know rates have steadily been going up but we should have done a bigger increase to start planning ahead.”
The largest costs associated with the connection to Lake Michigan water are proposed to occur in 2026 and 2027, Shotton said. Federal grants on a large scale to help pay for the transition are limited at best, village officials said in response to questions from trustees.
“Water is such a big deal across the entire country and we are in one of the best places in the world for fresh water as opposed to states such as Arizona and Colorado,” Oswego Village Administrator Dan Di Santo said. “If there were major grants to go to water systems, we may not be first on the list.”
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The analysis given to the board looked at the village’s historical water expenses and revenues and used the data to project through April of 2031, the consultants said.
“We also evaluated major tiers of users within the village that is primarily residential,” Shotton said.
The analysis included commercial, industrial and senior users, she said.
“Overall our goal is to provide rate increases that are necessary to provide a financially sound, fair and equitable utility funding and reduce the impact as much as possible to customers. The village considers 2031 a ‘planning horizon’ for the project since that is the completion target,” Hughes said. “By 2031 we will have completed the construction and know our costs. Our goal is to get us to the platform to where we need to be with the rates.”
The village’s leaders were supportive of developing a communication plan to inform the community that water and sewer rates will be going up.
“I don’t want to surprise anybody. I want to get this out in front of everyone as quickly and loudly as we can,” Oswego Village President Ryan Kauffman said.
The village continues to do everything possible to lessen the severity of future water rate hikes related to the Lake Michigan water project, Di Santo said in a response to questions from The Beacon-News.
The village established a real estate transfer tax via a successful referendum that will generate revenue for the water fund, he said. In addition, the village is working on an application for Water Infrastructure Financing and Innovation Act funding, which is a low-interest federal loan.
The Village Board earlier this year paid off $1.7 million of water fund debt early, he also said.
The village is hopeful the DuPage Water Commission’s contract negotiations with the city of Chicago will provide relief on water rates as well, he said.
“Following all of these measures, the impact to water rates from switching to Lake Michigan will be less than predicted back in 2021 when the board selected Lake Michigan from the new water source options,” Di Santo said.
Linda Girardi is a freelance reporter for The Beacon-News.