JOLIET – Joliet residents and businesses could face several years of rate increases to pay for water and sewer services under scenarios presented in a study of the city’s needs.
The Joliet City Council Finance Committee this week got a first look at a study that outlines revenue needs for water and sewer services.
Committee Chairman Michael Turk said Wednesday it’s too early to predict whether a rate increase would take effect by October, which is what city staff seeks. But he did say he wants to avoid a sharp hike, such as the one the city implemented in 2009 when rates were increased 35 percent.
“If any increases went into effect, I think it should be a gradual increase and not a steep one like we did in 2009,” Turk said.
One of the scenarios in a study presented to the committee Tuesday proposes a 36 percent rate increase this year. It would be followed by increases of 8 percent and 2 percent in the next two years and then 1 percent rate increases through 2022.
Another scenario proposes a 9 percent rate increase this year. It would be followed by rate increases of 8 percent, falling gradually to 3 percent in 2024.
A third scenario proposing no rate increases shows the city’s utilities department operating at a deficit by 2019.
Mayor Bob O’Dekirk said it was too early to determine whether he would support rate hikes.
“It’s the first time I’ve seen it,” O’Dekirk said of the proposed rate hikes.
The 35 percent rate hike in 2009 was followed by 5 percent rate hikes the following two years.
The study also showed rate increases proposed in the scenarios still would leave Joliet water and sewer bills by 2019 roughly in the mid-range compared to those paid now in neighboring communities. A survey of 18 communities showed Joliet in the low mid-range now and going into the high mid-range by 2019.
“If we do the projected increases for the next five years, we’re still in the middle of the pack with neighboring communities,” Utilities Director James Eggen told the Finance Committee at its Tuesday meeting.
Eggen said the city basically has experienced a rate freeze since 2011. He said the city should have continued increasing rates by 2 percent a year.
The study, done by consulting firm Burns & MacDonnell, also showed the utility department’s operating expenses have increased from less than $25 million in 2011 to more than $30 million this year.
Personnel costs have increased from roughly $12 million in 2011 to nearly $18 million in 2013. Numbers for more recent years were not in the study.
The study also projects $223 million in costs for capital projects in the next 10 years, including $71 million for projects mandated by the U.S. Environmental Protection Agency.