Water wars: Projects grow, ideas flow as cost of water rises
BY SUSAN DEMAR LAFFERTY email@example.com January 11, 2013 9:50PM
Water main breaks, like this one on Craig Street in Chicago Heights, are signs of aging infrastructure that adds to the soaring cost of water. | File photo
Updated: February 14, 2013 6:43AM
Homeowners and businesses throughout the Southland already have seen in their ever-rising bills what officials are saying these days about water: It is the new oil.
But fueled by the second of four annual rate increases imposed by the city of Chicago for Lake Michigan water, towns throughout the region are seeking more efficient, more conservative ways to provide this valuable natural resource so they can stem the tide of rising prices and ensure an ample supply for the future.
Just as motorists have turned to more fuel-efficient vehicles and more conservative driving habits, officials here have tapped into a variety of ideas: build new water delivery systems, buy pipelines from private companies, upgrade existing infrastructure and reconsider using wells.
“Water is a very hot topic right now,” Oak Lawn village manager Larry Deetjen said. “Water wars are occurring all across the country, not just in the Chicago area.”
To secure its future supply, Oak Lawn plans to ink a new 40-year deal with Chicago that would allow it to double the water supply for the village and the 12 other Southland towns that tap into Oak Lawn’s delivery system.
Oak Lawn last week approved interim water rate hikes to those towns — passing on Chicago’s 15 percent increase — and is negotiating to have all of them sign a 50-year master water supply agreement, detailing how all will share in an estimated $162 million infrastructure upgrade of the Oak Lawn system, which is separate from Chicago’s infrastructure upgrade.
The four-year project will provide a 60-inch water main — an increase from the existing 40-year-old, 48-inch line — and an alternate line in case of a main break.
The upgrades also call for emergency backup, upgraded pumping stations with energy-efficient turbines, and improved technology to detect problems in the system before there is a water main break, Deetjen said. They are now working on design drawings and will seek low-interest loans.
“This could only happen with tremendous cooperation,” Deetjen said, calling the project, “a model of intergovernmental cooperation.”
Each town will know what others are paying and rates can be adjusted every year. The agreement also establishes a formal advisory committee.
“We all agree this is the most effective solution,” Tinley Park village manager Scott Niehaus said. “Chicago water is a known entity. It’s not going anywhere. It’s not a private company, so there is no profit motive. By law, Chicago cannot charge us more than it charges its own residents.”
“It’s no secret the rates will be rising,” Mokena village manager John Downs said. “We just don’t know how much or when.”
Water rates in Mokena already went from $5.46 per 1,000 gallons to $5.86 as of Jan. 1. For a family using 9,000 gallons of water per month, that’s a $43-per-year increase.
In Orland Park, the average customer will see an annual increase of $64.26, according to the village. Of that, $40.61 is due to Chicago’s increase, while $18.80 is attributed to Oak Lawn’s increase and $4.86 due to Orland hiking its operating and maintenance charge by 3 percent.
In Flossmoor, homeowners will pay more for water improvements regardless of whether their actual water bill rises. Voters in November approved a bond issue allowing the village to spend $7.2 million over the next eight years to replace old water mains and plug the leaking of one-third of its water, village manager Bridget Wachtel said.
The owner of a $200,000 home will pay an extra $107 per year, or about $9 per month, according to village estimates.
While many Southland officials are fed up with Chicago’s rising rates, Deetjen said Chicago’s system is recognized as the “best in the world.”
“It is the best example of how to have a good, safe quantity of water. We’re fortunate to be a neighbor to a world-class city,” he said. “There has never been a disruption in water service. That’s the key.”
Alsip Mayor Patrick Kitching, however, said four years of steady increases from Chicago — 25 percent in 2012, and 15 percent each year through 2015 — is “just insane.”
His town and six others have formed the South Suburban Joint Area Water Agency in hopes of bypassing Chicago and tapping into the lake at Whiting, Ind., with their own pipeline.
The agency includes seven key members: Midlothian, Markham, Alsip, Harvey, Robbins, Blue Island and Calumet Park. Harvey sells water to Homewood, Flossmoor, Dixmoor, Hazel Crest, East Hazel Crest and Posen, while Alsip provides water to Crestwood and Palos Heights.
The agency has moved forward with a $5.5 million bond issue for a feasibility study and hopes to have cost estimates this spring, at which time it will decide whether it pays to move forward.
“We are not buying water from Indiana,” Midlothian Mayor Terry Stephens said. “We are taking it from the same lake. We will treat it and transmit it ourselves. I can’t say the costs will be lower, but we can prevent further increases.”
It is not just a matter of cost, but it is also “very important” to control the system, Blue Island Mayor Don Peloquin said, especially for towns that don’t want big water consumers — such as MetroSouth Medical Center in Blue Island, and the Coca-Cola plant in Alsip — to be chased away by high water bills.
“Chicago has been a good neighbor and I’m sure its increases are justified,” Peloquin said. “It has an antiquated system. It needs to upgrade the whole system and the best way is to pass the cost on.”
But if these towns can do it cheaper on their own, why not do it, he said. If it proves to be a cost-effective move, the South Suburban Joint Area Water Agency hopes to have pipes in the ground by 2015-16.
“It’s either this or be stuck with Chicago and keep getting burned,” Kitching said. “Why should we tolerate what the city is doing to us? This is the future of our community.”
But creating a new water system is “extraordinarily difficult” to do, said Daniel Injerd, of the Illinois Department of Natural Resources. Not only will these towns face financial and technical challenges, but also interstate issues. Members of the South Suburban Joint Area Water Agency would be subject to Indiana regulations in addition to Illinois’.
Chicago has a huge water system that is built and paid for, Injerd said. Creating a new system would be like “building a highway next to an existing one,” he said.
It’s “inevitable” that rates go up, Injerd said, noting that there has been a “significant uptrend” in water rates in the last five years. But that revenue should be used to maintain the system and not for something else, he said.
Brett Postl, of Postl-Yore and Associates, the engineer for the project that would bring water from Whiting, conceded it’s “a very big project.”
“Everyone is looking at the cost of infrastructure over time, and operation and maintenance costs. Very preliminary numbers say it would be cost-effective,” he said. “Water is not going to be cheap.”
A route for this new system has not yet been established.
More towns and teamwork
Water itself is not getting more expensive, according to Josh Ellis, director of water resource programs for the nonprofit Metropolitan Planning Council. But it is more costly to capture, clean, transport and pump it, and pay for the associated energy, labor, chemicals and infrastructure projects to reduce leaks.
Rates need to keep pace with those costs, he said.
“Often, we do not pay for the true cost of water. We defer capital improvement projects and maintenance or subsidize water systems with other revenue. Water services are not free, and people are waking up to that,” Ellis said.
Public partnerships, such as Oak Lawn’s system and the South Suburban Joint Area Water Agency, are a more efficient and equitable way to provide water than going it alone or using a private company, according to Food and Water Watch, a Washington, D.C.-based nonprofit that advocates for access to safe and affordable water.
It claimed on its website that a typical Illinois household with Lake Michigan water pays more than twice as much for water service from a privately owned company than from a municipality.
Homer Glen residents — who get Lake Michigan water via Illinois American Water — are well aware of that.
According to Homer Glen village manager Cameron Davis, village customers are paying $9.01 per 1,000 gallons, plus a flat, monthly fire-protection fee of $6.55, to Illinois American Water. According to a 2010 survey by the Illinois Department of Natural Resources, the rate is among the highest of any municipalities that get Lake Michigan water.
Because of that, Homer Glen has teamed up with Bolingbrook, Lemont, Woodridge and Romeoville to create the Northern Will County Water Agency, which is attemping to acquire pipelines owned by American Lake Water Co., a sister company of Illinois American Water. Last month, the agency filed an eminent domain lawsuit after the company rejected a bid to purchase the system.
Officials from Illinois American Water said Homer Glen will need to file a second eminent domain action to acquire pipelines within the village. Illinois American Water senior manager Michael Smyth has said eminent domain is “expensive, lengthy and divisive to a community.”
The cost of water has more than tripled for Chicago Heights and its customers — Glenwood and Ford Heights — which get lake water from Hammond.
After Chicago’s price hike, Hammond Mayor Thomas McDermott Jr. decided his city could raise prices for Illinois customers, to 12 percent below Chicago’s rate, still beating the going rate and thus maybe attracting even more customers.
For 30 years, Hammond sold water to Chicago Heights for 57.5 cents per 1,000 gallons. When the contract expired in November, the price gushed to $2.20 per 1,000 gallons.
With operation and maintenance costs, Chicago Heights customers’ total rate went from $2.47 to $5.50 per “unit” or 748 gallons, city attorney TJ Somer said.
Claiming Hammond’s increase was unjustified, Chicago Heights filed a lawsuit in U.S. District Court in October and requested a hearing with the Indiana Utility Regulatory Commission to have it intervene by establishing a new rate.
Last week, Chicago Heights asked the regulatory commission not to issue a ruling and put the lawsuit on hold to give the two cities time to reach a settlement on their own, Somer said. He hopes that can be accomplished by the end of this month.
McDermott, however, said the two sides have reached a verbal agreement on the $2.20 price for the next 20 years. A report filed in federal court Monday said the parties had reached a settlement in principle and stayed any action by the court and the regulatory commission until Jan. 31.
Somer said there is “no logic” to Hammond’s increase, because unlike Chicago, Hammond is not planning any major infrastructure improvements.
As a Chicago Heights customer, Glenwood Mayor Kerry Durkin said he is thinking about returning to well water. His contract with Chicago Heights expires in 10 months.
“We have a lot of options — buy from Chicago, buy from Hammond or use wells,” he said, adding that his town is now doing a well study. “I understand Hammond’s position, but I don’t agree with it.”
Years ago, no one was concerned about the cost of water, Durkin said. Now, people will have to change the way they use water.
“They will have to use rain barrels, take shorter showers and fix running toilets,” he said.
Contributing: Mike Nolan, Sun-Times Media