A water rate study was a main topic of discussion at the Homewood village board meeting on Dec. 10. Director of Finance Amy Zukowski said it was the first water rate study conducted for the village in 15 years.
Zukowski said the water and sewer fund must be self-sufficient. With major projects happening in the near future, including constructing a new water tower in the downtown area and the mandated replacement of lead line pipes, the fund will need additional revenue.
Dave Naumann, senior project manager for financial analysis and rate design with the engineering firm Burns & McDonnell, said the primary goals of the rate study are to evaluate current rates and future costs, options for financing lead service line replacement, and rate structure adjustments.
Burns & McDonnell was the firm that carried out Homewood’s improvements to receive Lake Michigan water from Hammond, Indiana, via Chicago Heights. The village previously purchased water from Harvey.
The U.S. Environmental Protection Agency (EPA) requires lead service line replacement to be completed within 10 years as of Oct. 8, 2024, according to Naumann. The estimated cost to complete this work in Homewood is $76 million.
Funding for the lead service line replacement is still in the works. Some possible options that are being evaluated are low interest loans through the Illinois EPA; potential for principal forgiveness (which depends on the demographics of the community); U.S. EPA reducing lead in drinking water grant program (which is more competitive); and Cook County TAP program. Some other funding options may be considered as well.
“You have to take care of what you currently have as well as address the current lead service line issue at the same time, it’s a difficult challenge,” said Naumann.
“As much as this is a big financial burden for our community, it’s something that needs to happen,” said Trustee Lauren Roman.
Naumann said once a financial plan with alternate funding strategies is complete, there will be three rate designs, two more board presentations and informational meetings for residents. He will present a draft plan with a final report.
This process is expected to conclude by summer 2025.
