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News
Montgomery expected to hike water rates : News : Oswego Ledger-Sentinel : Hometown Newspaper for Oswego and Montgomery, IllinoisMontgomery expected to hike water rates
| Committee receives four potential scenarios for increases
| by John Etheredge
| 11/19/2009
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Residents of Montgomery and the unincorporated Boulder Hill Subdivision will likely have to pay more for their water service effective Jan. 1, but just how much more has yet to be determined.
Peter Wallers, president of Engineering Enterprises, Inc. (EEI), an engineering consultant for the village, presented four potential rate hike scenarios to the village board's finance committee during a meeting last week.
Board members took no action following Wallers' presentation, but agreed to continue their discussions concerning a rate hike during a committee of the whole meeting this past Tuesday evening (Nov. 17).
Anne Marie Gaura, village manager, said the rate hike issue would also be placed on the agenda for the board's next finance committee meeting set for Wednesday, Dec. 9.
If the committee can agree on a rate hike plan Dec. 9, it could present its recommendation to the board for a final vote at the board's Dec. 14 regular meeting.
Village President Marilyn Michelini voiced support for one rate hike scenario that calls for water rates to be increased 50 cents for every 1,000 gallons used from the current $3.55 rate to $4.05. The scenario also calls for additional rate hikes of three percent annually for seven years beginning in 2007.
Board member Robert Watermann noted the village is not seeking to raise rates to "maliciously place additional costs" on residents.
"This is to maintain our water program," Watermann said. "I think it is very responsible."
If the board chooses to maintain its current rate structure of annual increase of three percent, the village's water fund will show a deficit of just over $1 million for fiscal year 2012 which will begin April 1, 2011.
However, if the board chooses to approve the 50 cent rate hike followed by three percent annual increases for the following seven years preferred by Michelini, the water fund will show a surplus of $214,619 for the 2012 fiscal year.
In his presentation, Wallers noted that the village has experienced a significant drop in revenues in water connection service fees due to the downturn in new home starts.
According to Wallers, village water tap-on fee revenues were approximately $1.1 million in 2007, but plummeted to just over $200,000 last year and will be less than $200,000 this year.
Wallers also projects that tap-on fee revenues will remain at well under $100,000 annually through 2013 and not show an increase to just under $200,000 in 2014.
The village will require additional revenues to continue ongoing maintenance of its water system and to make needed improvements, according to Wallers.
Michelini noted previous boards made the mistake of not increasing water rates to keep up with the cost for maintaining and operating the system.
"We went without an increase for nine years," she said.
Board member William Keck agreed with Michelini.
"I've seen how we've been bitten in the past by not putting into place some increase we should have put through," Keck said.
Board member Denny Lee said the village has come to rely on the revenues from the water connection fees to pay for operating and maintaining its water system. But with the downturn in the new home building market, Lee said those revenues are no longer there.
Referring to the neighboring Village of Oswego, Lee said, "We just don't want to get caught like a village south of us where all of a sudden they have a study and they are supposed to raise their rates 85 percent."
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