Kadner: Water better than slots for cash in Hammond mayor’s eyes
By Phil Kadner firstname.lastname@example.org November 8, 2012 5:42PM
Hammond Mayor Thomas McDermott Jr. is shown in this July 4, 2011 file photo.
Updated: December 10, 2012 6:25AM
Water, not casino revenue, is the key to economic development in Indiana, says the Hammond mayor who wants to turn the south suburbs into a cash station for his city.
“This is millions of dollars for Hammond residents,” Mayor Thomas McDermott Jr. recently told his residents in explaining a quadrupling of water prices to Chicago Heights.
“This is the future for Hammond: Water,” McDermott said. “A lot of people talk about (casino) gaming. Gaming is nice. Water’s the future for Hammond.”
He adds that if businesses have to pay more for water in the south suburbs, they’ll choose to open new plants in Indiana to save money.
“Businesses need a lot of water. If they’re going to build a big plant somewhere and they look at Sauk Village and see the price of water is $10 bucks for 1,000 gallons and the price in Hammond is 46 cents for 1,000 gallons, that’s another reason for them to leave Illinois and come to Indiana.”
The mayor was apparently referring to a Sauk Village referendum for Lake Michigan water that put the price at $10 per 1,000 gallons.
Chicago Heights is suing Hammond in federal court to prevent Hammond from increasing the price of water from 57 cents per 1,000 gallons to $2.20 per 1,000 gallons.
Hammond sells drinking water to Chicago Heights, which in turn supplies the lake water to Glenwood, Thornton, South Chicago Heights and Ford Heights.
“These are the most impoverished communities in Illinois,” Chicago Heights Mayor David Gonzalez said. “The mayor of Hammond is trying to gouge them to boost economic development in his community.
“This is not about the rising cost of supplying water for Hammond. This is about Illinois planning to build casinos that will take revenue away from the casinos in Hammond and the mayor there trying to make up that lost revenue by forcing us to pay for a precious resource.”
Chicago Heights is also appealing to the Indiana Utility Regulatory Commission, which regulates water rates in Indiana, to intervene.
But during a program on WBEZ-FM (91.5), McDermott boasted that while the Indiana commission regulates the rates for water within Indiana, it does not regulate the price it can charge for water in Illinois.
“So we would rather sell our water in Illinois,” he laughed.
McDermott, who did not return a phone call seeking comment, has argued in other venues that Chicago is now charging its suburban customers $2.51 per 1,000 gallons for water, so Hammond water is still a bargain.
“Chicago increased its rates to pay for $147 million in improvements in its water distribution system,” Gonzalez said. “Hammond’s not saying its costs have increased. It’s just doing this to make money on the backs of poor communities, and I’m not going to agree to that until a court tells me I have no other choice.”
Chicago Heights had a 30-year agreement with Hammond to supply water at 57 cents for 1,000 gallons that expires Monday.
Although Hammond officials have said they would not stop providing water to Chicago Heights until March — to give the city time to choose a new provider — Gonzalez said there’s no realistic alternative.
“This is not like buying a loaf of bread where you have 100 different stores to choose from,” Gonzalez said.
“In order to hook up to the Chicago water system, for example, we would need five years to build the pipelines connecting our suburb.
“The is about monopolizing a vital resource and price-gouging people because they have no choice.”
In addition to increasing rates to $2.20 per thousand gallons immediately, the new Hammond proposal would allow the city to raise rates every two years to 88 percent of whatever Chicago is charging its customers.
“What does the price of water in Chicago have to do with the price of water in Hammond?” Gonzalez said. “Nothing. There’s no connection.”
McDermott has contended that Chicago sets the market price and he’s just using that to benefit his residents.
“Chicago Heights doesn’t like our price, they can say no,” McDermott has said. “We’ll go find somebody else and they’ll be happy.”
T.J. Somer, the Chicago Heights attorney, said the contract the city signed 30 years ago with Hammond links the water rates to those set by the Indiana regulatory agency.
A federal judge, at a Monday hearing, refused to issue an injunction against Hammond until the regulatory commission hears the issue on Nov. 19.
“Hammond has promised to continue providing water to us, but at a cost of $2.20,” Gonzalez said.
The Hammond mayor contends that Chicago Heights is price-gouging its water customers and making money off Hammond water.
“That’s not true,” Gonzalez said. “We do charge more than $3 per 1,000 gallons for the water, but that covers the cost of the distribution system, repairing water mains, electricity to run the pumps, the crews to maintain the pumps.
“We’re actually losing money on the water system and provided the evidence to the court. We don’t use it as a profit center, the way Hammond wants to.”
Hammond draws its water from Lake Michigan. The Great Lakes are a natural resource, and the way I see it the water there doesn’t belong to any one city.
Hammond deserves to be reimbursed for the cost of drawing water from the lake and maintaining the system.
But when a government entity decides to market Lake Michigan water as if it were a commodity like oil, that sure seems wrong to me.
Northwest Indiana has been experiencing an economic boom for more than a decade, at the expense of the south suburbs.
Illinois and Cook County tax policies are responsible for a lot of that growth in Indiana.
Illinois legislators have done nothing to defend their turf or stop the economic bleeding.
They’ve done more for the Hoosiers than their people. And if this water battle doesn’t spark some righteous indignation, nothing will.