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New water and sewer rate ordinance?
passed by Village Board

Revenue to help offset costs for Lake Michigan water connection

At its November 7 meeting, the Village of Oswego?s Board of Trustees approved a new water and sewer rate ordinance to help fund the transition to Lake Michigan water through the DuPage Water Commission in 2027. The ordinance increases the sanitary sewer and water system rates starting on January 1, 2024, and increases each January 1 through 2031. While rate changes will take effect in January 2024, the first utility bill to reflect the increase will be issued in March 2024.?

The Village?s goal is to minimize rate increases to customers, ensure that all water and sewer customers pay their fair share in rates, have the funds necessary to connect to Lake Michigan, and properly maintain the existing water and sewer system. Over the last several years, the Village has taken several actions to offset the project?s costs, including the passage of a real estate transfer tax referendum that allocates all revenue to the water fund, passing on significant water connection fees to developers, and investing in the Village?s water infrastructure to allow minimal water loss due to water main leaks and other challenges.

The Board?s approval comes after a water and sewer rate study was conducted earlier this year that considered several scenarios to increase rates. After presentations and discussion at meetings over the last several months, the Board chose the scenario that will create the lowest bill for typical residential customers and seniors. The senior rate continues to be half of the non-senior rate, as well.

Water rates were initially expected to more than double, however; the study found ways that the Village can offset project costs, and as such utility bills are only expected to increase by approximately 4.5% to 6% annually, over the next 8 years. The Village will review the costs on an annual basis to ensure the rates are adjusted accordingly. The study also determined that the new rates are in line with other communities that receive Lake Michigan water.

?We?re very fortunate that the necessary rate increases are much less than we first expected when we began studying the switch to Lake Michigan water,? Village President Ryan Kauffman said. ?The new rate structure will ensure a more equitable rate for all water users and cause the least amount of impact on our residents, especially seniors.?

The Village?s current rate structure charges every customer without regard to their meter size and usage, and every user pays the same rate. The new rates will be implemented with a ?fixed scaled meter? charge, a fixed fee based on the meter size, as well as a ?residential inclining block? and a ?commercial/industrial inclining block? rate based on usage categories. The rates are graduated based on the size of the water meter and the amount of usage by the customer. Smaller users, including residents and seniors, create less impact on the overall water system so they will pay less. Likewise, larger users have more impact on the overall system so they will pay more.

The new rate structure will be implemented in several steps. Starting in January 2024, the rate for all sewer users will increase 4% annually. The sewer rate pays for sewer line maintenance, infiltration/inflow studies and sewer line repairs. Residents eligible for the Kendall and Will County resident assessment freeze will continue to see a 50% discount on the sewer rate.

Next, the monthly service charge, a fixed charge to offset costs that doesn?t vary based upon use, will increase by $2 in 2024, $1 in each year from 2025 to 2027, and $2 in each year from 2028 to 2031 for ? inch meters, which is the standard residential meter size. All meter sizes will be billed the same in 2024. Beginning in 2025, the rate for all meters above ? inch will be increased to address their proportional impact. Meters larger than ? inches will increase by the ratio of their diameter to a ? inch meter. For example, a 1-inch meter will be 1.78 x the fee to a ? inch meter.

Lastly, volumetric water rates will increase 4% in 2024 and 5% in 2025. Beginning in 2026, water will be billed based on an inclining block rate. The inclining block establishes progressively higher rates for higher bands of volume. For example, a customer using 17,000 gallons of water over a bimonthly period in 2026, the volumetric fee will be computed as follows: 0 to 15 kgal = 15 kgal x $8.39/kgal = $125.85 15 to 17 kgal = 2 kgal x $8.72/kgal = $17.44 Total water volumetric bimonthly fee for 17,000 gallons: $125.85 + $17.44= $143.29.

The new fixed scaled meter with universal inclining block water volumetric rate allows the Village to prorate its revenue requirements more equitably across its diverse customer base. The Village continues to find ways to offset the cost of the project to residents which is currently estimated at approximately $73 million for the Village?s share. The rates will be adjusted accordingly as the Village conducts engineering studies over the next two years, continues to work with Montgomery and Yorkville to help offset costs, and receives additional federal and state funding and loan opportunities.

The connection to Lake Michigan water offers many benefits including a sustainable water source, soft water that allows users to dispose of water softeners and filters, as well as minimal mineral buildup on plumbing and appliances.

For more information about the water source project, the new water and sewer rate structure, visit oswegoil.org/water.