Growing doubts about feasibility of water project
BY SUSAN DEMAR LAFFERTY email@example.com July 11, 2014 7:52PM
Updated: August 14, 2014 6:38AM
Blue Island and Midlothian, two of the six remaining towns in the South Suburban Joint Area Water Agency, are not willing to spend more money on a project swirling with uncertainty, officials said.
Seven towns initially banded together to try to create their own Lake Michigan water system from Hammond, Indiana, freeing them from Chicago’s rising water rates. Calumet Park has withdrawn, leaving Alsip, Blue Island, Markham, Harvey, Midlothian and Robbins.
At a critical time in the planning process, when $3 million more is needed for additional engineering work to move the estimated $300 million project forward, the Blue Island City Council voted unanimously at its July 8 meeting to explore the city’s legal options.
“Do we withdraw? Do we stay and watch what money we have invested? Can we get a refund?” said city treasurer Carmine Bilotto, who has represented Blue Island on the agency’s board for the past year. “It was a good concept, but it was handled wrong.”
Midlothian officials will “wait and see” what happens at the upcoming agency meeting before they decide whether to pull out, said village Trustee Don Killelea, Midlothian’s representative to the water agency board.
“Our (village) board has lost confidence in the whole process,” Killelea said. “We are upset with recent developments.”
He referred to growing concerns over the financial viability of Harvey, which is deeply in debt, struggling to meet its payroll and has been sued by the U.S. Securities and Exchange Commission. In addition, there is a federal criminal investigation into the city’s alleged misuse of bond money.
Harvey represents 40 percent of the agency’s customers and sells water to Homewood, Flossmoor, Hazel Crest and East Hazel Crest. The city is about $23 million in arrears to Chicago’s water department.
In its recent lawsuit, the SEC accuses Harvey’s comptroller, Joseph Letke, of Frankfort, with financial fraud in representing the city. Letke was one of the water agency’s financial consultants.
At the end of last year, the agency board terminated its contract, and now is in litigation, with its first engineering consultant, Brett Postl, and has hired Robinson Engineering to complete the task.
“The trust factor is going down the tubes. You want to be able to feel good about the advice you are getting because you are committing your town for 33 years,” Killelea said.
Bilotto said he has asked for a financial feasibility study.
“I do not want to throw bad money after bad money,” he said, adding that water agency members “tried to turn this ship around.”
The board’s attorney, Michael Stillman, said the uneasiness of officials in Blue Island and Midlothian is to be expected. The agency is working on its long-term goal of independence from Chicago’s water system, he said, but “there is no answer yet.”
“We took a chance (on the water project). It sounded good, and we do not regret it. We thought it would benefit Midlothian,” Killelea said. “The X factor is, what is Chicago going to do? It will need to rejuvenate its infrastructure, too, and it will keep raising its water rates.
“But Chicago has the lowest rates in the nation, and its water delivery system is reliable. Why are we worried about it?”