water pie chart
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2. How much should water cost? Villages cover growing expenses

In a local grocery store recently, a 28-pack of half-liter Nestle bottled water, about four gallons, was on sale for $3. So each gallon cost about 75 cents. In Flossmoor, however, that 75 cents would purchase more than 50 gallons of water. Water supplied by our villages has gotten more expensive in recent years, a response to rising costs of delivering it.

Editor’s note: This is the second story in a series that takes a look at our water system from various angles. These stories originally appeared in the August 2016 print edition of the Chronicle.

During a recent trip to a local gas station convenience store, a liter of generic bottled water was priced at 99 cents. 

Meanwhile, in the grocery store next door, a 28-pack of half-liter Nestle bottled water, about four gallons, was on sale for $3. So each gallon cost about 75 cents.

  This graph shows the proportions
  of Homewood’s water system costs.
  As Chicago water rates have
  increased, the cost of purchasing
  water has grown in relation to other
  system expenses.

  (Click on the image above to see 
  a larger version.)

In Flossmoor, however, that 75 cents would purchase more than 50 gallons of water. The village’s new water and sewer rate, approved in April, sets the price at $13.95 per thousand gallons. 

We all have a general idea about how much water should cost. But how much we spend on water is sometimes the result of personal choice.

Water is a commodity like no other. 

We need and use water. At the same time, we know that the price of water keeps going up.

Homewood and Flossmoor buy their water from Chicago by way of Harvey. Chicago, the steward of a vast aquatic resource, has recognized the value of water.

In recent years, the city has flexed its muscles as a water provider and dictated rate hikes of 25 percent in 2012 and 15 percent in 2013, 2014 and 2015. Harvey also set smaller rate hikes during those years.

Homewood and Flossmoor had no choice except to pass along most of the city’s rate hikes. 

Homewood Finance Director Dennis Bubenik noted that other costs, including capital and labor expenses, did not soar at the same pace as Chicago’s water rate.

“We didn’t just pass on Chicago’s increase,” he said, noting that capital and operating costs have been flat in recent years, and labor costs have increased only modestly. The water fund carries no debt.

Homewood Mayor Richard Hofeld said the village’s water system finances are kept in an enterprise fund, separate from the rest of the village’s budget, and the system has to generate enough income to pay its expenses.

“We don’t build a profit into it,” Bubenik said. 

  This graph shows the difference
  between Chicago water rate hikes
  and the lower rate hikes
  implemented by Homewood during
  recent years. Village officials
  said other water system costs did
  not increase enough to justify
  passing the whole Chicago rate
  hike on to local water customers.

  (Click on the image above to see 
  a larger version.)

At the same time, Flossmoor faced the additional challenge of trying to correct a 33 percent loss of water due to leaky water mains and unreliable meters.

The cost of water as it arrives from Harvey is slightly more than $4 per thousand gallons. Homewood and Flossmoor add costs for maintenance of the local water systems.

When Flossmoor approved its water rate in April, much of the discussion centered around whether the village’s water fund had sufficient reserves, especially in light of a continuing loss of water.

But the past four price hikes from Chicago loomed as a very real factor as the village tried to keep costs from spinning out of control.

Earlier this month, Chicago Mayor Rahm Emanuel proposed increasing taxes on water and sewer utilities. Media reports have not specified whether the hike would affect rates to suburban water customers. 

The recent Chicago rate hikes were also a factor in Homewood’s decision last year to switch from a quarterly to monthly billing cycle.

“Quarterly bills used to be an average of a couple hundred bucks,” Bubenik said. With the series of rate hikes, “we were starting to push $400 to $500” as an average residential bill.
The village decided to bill more frequently.

“You’re still paying the same amount over three months. It’s just easier on your budget,” he said. The average monthly bill is about $150.

Another aspect of the shorter billing cycle and new meter technology is the ability it offers to discover usage spikes before the cost escalates dramatically. Under the old system, an unnoticed usage increase could cost residents hundreds or even thousands of dollars before it was discovered.

Bubenik said residents now can check with the village to get more precise and current usage information than was available with older meters. Some residents believe the village can monitor usage continuously at individual homes, but Bubenik said that’s not practical.

In nearly every case, the cause of water bill spikes is a leak somewhere in the residence, and toilets are the most common source, Bubenik said. 

Those leaks can be difficult to detect, though, with older model toilets that have overflow tubes. Water can spill into the overflow without making much sound, and that situation can go undetected for some time, he said.

As part of the new procedure, Homewood simplified the system for residents who fail to pay their bills on time. If payment is not made before the first day of the month following the due date, water service can be disconnected.

Residents who run afoul of the water payment deadline sometimes express anger with the village, but Bubenik said the policies are necessary.

“We pay up front. If everybody didn’t pay, we’d be in deep trouble,” Bubenik stressed.

Information for the graphs provided by the Homewood Finance Department. Design by Bruce Swart/H-F Chronicle and Homewood Finance Director Dennis Bubenik.

Eric Crump contributed to this story.

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