Homer Glen tables bond vote for water change
By Michelle Mullins Correspondent August 7, 2012 1:20PM
Updated: September 9, 2012 6:15AM
The village of Homer Glen has tabled a vote to approve up to $50 million in bonds to fund various capital improvements, including a possible eminent domain purchase of the water system, after residents on Monday said they didn’t have enough information on the matter.
The village will continue the discussion at its Aug. 14 board meeting.
Mayor Jim Daley said the village plans to first issue $25 million in bonds. Of that money, $9 million would go toward acquiring the Bedford Park water transmission line from American Lake Water, he said.
Five communities have joined forces to form a water agency in hopes of providing cheaper water service for residents. The agency made an offer of $34 million for the Bedford Park transmission line.
Homer Glen would share the cost of acquiring the transmission line with the other communities in the Northern Will County Water Agency, which also includes Bolingbrook, Romeoville, Woodridge and Lemont. The village’s share would be 20.6 percent based on the number of customers using the service, Daley said.
The bond issue also is for other capital improvement projects, which include $2.5 million to fund the village’s portion of the 159th Street widening project; $7 million for extending sewer lines to unincorporated areas and $6.4 million to complete roads, sidewalks, detention ponds and other issues in several subdivisions that were left incomplete after the housing market collapsed.
At a special board meeting Monday, village officials heard from more than two dozen residents in a session that lasted nearly 2 ½ hours. More than 150 people packed village hall hoping to learn more about the proposal.
Most residents said they didn’t have enough information on the bond issue.
Others encouraged the village board to let voters decide through a referendum proposal in November.
The village plans to pay back the bonds through its one percent home rule sales tax. The village has no municipal tax. Because the village’s population dipped below 25,000 residents, which would automatically ensure the village of home rule status, residents must vote in November to retain home rule.
However, if the village board approves the bond ordinance before November, the one percent home rule sales tax would remain in effect because it is tied to debt, Daley said. The village receives about $2.7 million in annual revenue generated by the sales tax.
The cost of borrowing the money is at an all-time low, Daley said.
The village’s bond counsel said it expects to receive an interest rate of between 2.5 percent and 2.8 percent and the bonds would mature in about 12 or 13 years. The village recently received a AA rating from Standard & Poor’s.
Daley said the village will be able to operate the water system cheaper for residents who have long complained about the price of water.
“Water is a life necessity,” he said. “This is a monopoly. We don’t have anywhere to go to buy water except for them. … We’re trying to provide the things you’ve asked us to do.”
Some residents, however, were not convinced.
“I do not believe in a hostile takeover of any company,” resident Terry Elkins said.
Michael Smyth, senior operations manager for Illinois American Water, said government tends to under estimate the cost to take over a water and wastewater system. He said in 2005, Peoria tried to take over the Illinois American Water system, putting its value at $67 million. The actual value was $220 million, and the city council there opted not to acquire the system because of its high cost, he said.
He called the village’s plan “risky and a disservice to our customers.”
“As we have consistently stated the past several years, the American Lake Water Company and Illinois American Water Company are not for sale,” Smyth said. “As such, the only means of taking over both entities would be through a costly and risky eminent domain action. The attempt to take over American Lake Water would involve local governments in a legal battle that would take years to resolve and cost taxpayers millions of dollars.”
Daley said Illinois American Water is a for-profit company that has been using robo-calls and scare tactics to alarm residents.
“Illinois American Water … will try to scare everybody just to keep the cash cow going,” Daley said.
Resident Tom Bernicky applauded the board for fighting on behalf of residents for lower water rates, but urged the board to wait.
“Debt is a poison,” he said. “We can’t start down that road. … If it’s the right thing to do today, it will be the right thing to do in December or March.”
Some residents said they were interested in the other capital improvement projects, but the projects should be separated and not lumped together with the water system takeover.