Joliet council takes close look at water and sewer rate study
Updated: Dec 17, 2020
The city of Joliet is considering increases for its water and sewer rates.
At Tuesday’s meeting of the Joliet City Council, the findings and recommendations of water and sewer rate study were reviewed.
The firm, Burns and McDonnell was previously tasked with completing a comprehensive analysis in 2015 and refreshing it in 2016.
A presentation to the city council shows that between 2000 and 2018, water and sewer rates are growing nationally at rate of 5% annually. During that same time period, the city’s rates remained stagnant until the last eight years.
Members of the city council adopted three 7% increases annually for both water and sewer rates for 2016-2018.
Dave Naumann, project manager for Burns and McDonnell, said the last three years have started to move the needle closing the gap between the national average for water and sewer rates and the city’s.
Joliet officials wanted to take another look at the study with the latest information.
Among the reasons people often find their water and sewer rates are increasing is due to inflation, increasing regulatory requirements and consent orders and aging facilities require renewal and replacement.
The city has several projects to undertake in the coming years. Those include a long-term control plan to reduce combined sewer overflow and phosphorus removal at wastewater treatment plants.
“We see the need for revenue increases,” Naumann said. “We need those increases to sustain reserves and to provide a robust financial plan and cash flow, so that you can issue new debt as needed.”
Naumann recommended a phased implementation of water and sewer rate increases rather than a one-time increase.
The presentation to the council shows two financial planning options for the city to consider.
Scenario No. 1 includes an 8.5% increase to water and sewer rates over three years. After which, the city could take another look at its financial plan.
Scenario No. 2 includes a 10.5% increase to water and sewer rates over three years. After which, the city could take another look at its financial plan.
Burns and McDonnell is recommending the second option for the city, which Naumann said equates to a $4 per month increase.
Councilman Larry Hug questioned what happens if the city doesn’t choose to apply an increase to its water and sewer rates.
Naumann explained that the city wouldn’t have the financial flexibility to finance equipment renewals and replacements. He said the difference between the two scenarios is about $9 million.
Both options would give the city the ability to reach target levels for operating reserve funds.