The Homewood Village Board has three options to consider as it studies how it will raise water rates.

Dave Naumann, senior project manager for financial analysis and rate design with the engineering firm Burns & McDonnell, presented the three options for the water rate study to trustees on July 8.

Naumann started work on the water rate study in December 2024. He presented an update in April that included financial planning for the federally mandated lead service line replacement. The work must be funded through the water fund.

According to Homewood Director of Finance Amy Zukowski, the goal of the study is to determine the increase residents will pay for water service. 

Naumann’s presentation showed the need for a 7.75% annual increase in revenue through 2034 in order to fund the 10-year lead line replacement project, which will cost about $76.6 million. The amount of increase in water bills for Homewood residents depends on which option the village decides to implement, Naumann said. 

The rate design options are meant to “ensure the fairness as best as possible across different users, such as commercial, residential and industrial,” Zukowski said. 

Naumann’s graph depicted current water bill costs and volumetric fee rates (per 1,000 gallons) for neighboring municipalities for comparison purposes, which showed Homewood falling in the middle for both, with a cost of $47.54 monthly and $10.97 in fees.

However, Homewood falls on the low end of the scale when it comes to fixed fees, which is currently $3.66 per month, he said. 

“That’s about $300,000 in revenue,” Naumann said, adding, “so you’re getting about 6% of your revenue through that fixed charge, which is really pretty low.” 

Naumann presented the board with these options:

• Option 1 is a 7.75% increase across the board for residential and non-residential customers. 
• Option 2 increases the fixed fee by meter size with the same volumetric rate for everyone. Naumann recommended the village consider taking Option 2.
• Option 3 increases the fixed fee as presented in Option 2, while increasing the volumetric rate for anyone that goes above the 2,000 gallon usage threshold. While this would be the preferred route for most residential customers, it would negatively impact non-residential customers, such as businesses, Naumann said. 

According to Naumann, about 70% of Homewood’s residential customers use 4,000 gallons or less per month, while 95% use 10,000 gallons or less per month. 

“Nobody likes increased fees,” Trustee Patrick Siemsen said, adding, “with this, it’s very controlled. If we do not invest in this and keep our water, we lose all that.” He added that some area communities that did not maintain adequate rates ended up selling to private water providers, which gave the local government less control over rates.

“I want to know more information about who is affected by the higher meter and the higher rates, because I personally know a handful of residents who are senior citizens on fixed incomes living in those condos, and this is going to fall back on them,” Trustee Lauren Roman said. 

The next step is for the board to review which option they would prefer to take. 

“As everyone on the board has said, we have a lot to look at,” Mayor Rich Hofeld said, adding, “and we’ll be discussing it at a future meeting.”