The village council will discuss a potential water rate hike for both residents and businesses in Forest Park at its meeting next Monday. The council refrained from voting to approve the increase following concerns raised by Commissioner Terry Steinbach at its March 13 meeting.
The proposed plan includes a 6 percent hike for residential customers in the first year of the increase, raising rates from $2.43 to $2.58 per 100 cubic feet of water transmitted for residential customers and from $3.12 to $3.31 for multi-family units. Commercial rates, which were also raised in 2004, would be raised by 4 percent from the current rate of $4.03 per 1,000 square feet.
All rates would then increase by 3 percent each subsequent year.
Steinbach asked that the council reconsider the proposed plan to raise rates for senior citizens. The proposed plan raises rates for seniors by 3 percent per year, but does not include the 6 percent hike in the first year proposed for other residential customers.
“Seniors have been having a very tough time making ends meet with prescription costs and things of that nature,” she said, noting that not increasing the senior rate at all would only reduce revenues by $42,000 over the next six years.
Steinbach also recommended decreasing the hike for residential and multi-family customers to 3 percent in the first year, proposing that the village instead scale back on planned road and alley improvements in the ongoing Village Improvement Plan project which would require water infrastructure improvements.
Though a motion to make the changes suggested by Steinbach was not seconded, the council unanimously voted to table discussion of the increase so that the village can conduct further research into the effects of Steinbach’s suggestions.
Village Administrator Michael Sturino said later that after further research, the village staff stands by its initial recommendation. He noted that rates for seniors had actually been dropped by about 2 percent during the last water rate increase in 2001.
Even without Steinbach’s modifications, the proposed increases are significantly lower than those recommended by engineer Christopher Burke during a November presentation to the council regarding funding options for the village’s water system overhaul.
Nearly 50 percent of the village’s water mains were replaced during the first phase of the project in 2003. Burke recommended to the council that during the second phase, in addition to replacing the remaining mains, the village also vastly increase its water storage capacity as well as the number of emergency feeds which allow it to tap into neighboring village’s water supplies in cases of emergency.
The total cost of Burke’s recommendations would have been nearly $18 million, which would have required a first year rate hike 10 percent, as well as an annual surcharge.
Sturino said that the village has decided not to embark on a second phase of the project at this time.
“There will be no immediate village wide completion of our water main replacement program,” he said. “Instead, we’re looking at a rate that will support gradual change and put us in a financial position where we’ll be able to act upon government grants and loans so we can have sufficient reserves,” he said.
“It’s preferred that we have better capacity and better pressure village wide, but at the end of the day it seemed evident that consumers can really only absorb so much of a rate increase,” said Sturino.
According to a report prepared by Sturino and Finance Director Judy Kovacs, the village is anticipating a $325,000 deficit in its water fund at the conclusion of the current fiscal year, which ends April 30.
Projections show that if the rates were left unaffected, the village would begin to endure net losses beginning in fiscal year 2011. According to the report, the results could include inability to secure government grants which require matching funds from the recipients and inability to finance future water infrastructure projects.
Forest Park currently ranks toward the bottom when compared to other local communities for residential rates, but close to the top for commercial rates.
According to information provided by engineer Michael Stirk, Forest Park’s residential rates are currently the second lowest among 11 area municipalities, with only Melrose Park having lower rates.
The commercial rate, however, is lower than only Maywood and Riverside.
Forest Park receives 3.4 million gallons of water per day from the city of Chicago, 1.5 million of which it supplies to the villages of Brookfield and North Riverside through the Brookfield North Riverside Water Commission, according to Burke’s presentation.