Officials in Homewood and Flossmoor want residents to be assured that they’re working to maintain reliable and clean water for the villages, despite recent developments in Harvey.
On July 19, Cook County Circuit Judge Kathleen Pantle removed control over water finances* from Harvey’s municipal government. Harvey buys Lake Michigan water from Chicago and then sells it to other south suburban towns. Under the court order, the village’s water system will be controlled by an independent overseer.
Homewood buys water from Harvey and then sells it to Flossmoor. Both villages said they expect service to continue and are taking steps to make sure that’s the case.
Homewood village staff have met to prepare a contingency plan in case Harvey’s water system fails, Village Manager Jim Marino said. He couldn’t publicly share the details of any potential plan, yet.
“The judge’s order clearly explains that Harvey’s water fund is in disarray and they lack the funds to properly maintain their water system,” Marino said. “Harvey’s financial condition, as revealed in the order, is very disturbing.”
Flossmoor Village Manager Bridget Wachtel said in an email to the Chronicle that the impact to her village was not immediate.
“Homewood and Flossmoor have been in communication and take any concern about the distribution of water very seriously,” Wachtel said. “The provision of water is a necessary and core service for municipalities like Homewood and Flossmoor and we will continue to work diligently to provide this service in a safe and reliable manner.”
State law requires funds from the sale of water to be used only on a municipality’s own water bill, to pay for water infrastructure or to pay off bonds used for water infrastructure until all those bills were paid.
The City of Chicago alleged that Harvey spent much of its water revenue on other things, including payroll for departments other than the water department. It also argued that Harvey made fraudulent payments from the water fund to Kay Jewelers, Kohl’s and a Capital One credit card. Harvey didn’t deny these allegations but said those fraudulent payments were reimbursed to the village’s accounts.
The judge noted in her ruling that Harvey failed to deposit more than $8 million in revenue into the water fund in 2015 and 2016 and untold more in 2017. Harvey also misspent $26 million, transferring it from the water fund to the general fund to keep the town afloat, the ruling states.
“It is undisputed that Harvey’s water fund finances are in disarray and are being unlawfully raided by Harvey’s government to pay for non water-related expenses,” Pantel wrote in the ruling.
Harvey was also behind $22 million in water payments to Chicago and in a previous court ruling worked out a payment plan. Harvey has since reneged on that agreement. As a result of the court ruling, Homewood now makes its water payments directly to Chicago.
Homewood Village Attorney Chris Cummings attended the July 19 hearing, Marino said, to keep the village aware of the situation.
“Our greatest concern is the integrity of Harvey’s water system. We know that portions of Harvey’s water system are in disrepair and we are taking steps to see that those repairs are made as soon as possible,” Marino said. “We are fully aware of the situation and taking steps to ensure our residents and businesses continue to receive clean and uninterrupted drinking water.”
Homewood commissioned an inspection of Harvey’s water infrastructure in 2014 and 2015. A memorandum from Baxter and Woodman Consulting Engineers to Homewood Public Works Director John Schaefer in December 2015 revealed that much of that inspection was incomplete because Harvey did not supply requested information and limited access to some facilities.
This story originally noted Judge Kathleen Pantle’s ruling would transfer control of Harvey’s water operations to the receiver. The receiver’s authority is over water-related finances. The Chronicle regrets the error.