Correction: This story originally stated the board had approved a water rate hike. The board expressed support for one option but will vote to officially set water ratees at a future meeting. The Chronicle apologies for the error.

Homewood residents will see their water bills increase by about $3.36 per month the first year of a five-year rate plan through 2030. The Homewood Village Board expressed support at the July 22 meeting for one of three options presented by the consultant developing a water rate study. 

The consulting firm, Burns & McDonnell, will now complete the study with that option in mind. The board will vote on a final rate at a future meeting.

Amy Zukowski, Homewood finance director, says a 7.75% increase is likely to begin Jan. 1, 2026. For a typical residential customer who uses about 4,000 gallons per month, the average rate of $47.54 per month will jump to $68.60 per month over the next five years. 

The village needs to increase rates because it has an estimated $101 million in capital expenses through 2035, and for revenue predictability.

The village water fund is self-supporting. All expenses must be paid through water bills or borrowing or both, Zukowski said. The fund is low now because the village was able to pay for  necessary improvements to the system when it converted to getting its Lake Michigan water supply from Hammond, Indiana, in 2022. Homewood had previously bought Chicago’s lake water from Harvey.

The village board recently learned it is likely to receive a grant for a $4.1 million loan from the Illinois Environmental Protection Agency to cover a portion of the cost of replacing lead lines. The federal government has mandated all lead lines for water service by replaced within 10 years for most municipalities. It is estimated Homewood will need $70 million for that project. 

According to Zukowski, while the village approved a five-year rate plan, village projections show annual increases may continue for up to nine years to meet long-term water system and lead line replacement costs. 

Dave Naumann, senior project manager for financial analysis and rate design with the engineering firm Burns & McDonnell, began the water rate study in December 2024 to determine funding strategies for the federally mandated 10-year lead service line replacement project, which is projected to cost $76.6 million over the next decade, he said.

Naumann presented financial planning information to the board in April, which showed the need for an annual increase of 7.75% through 2034. 

According to a graph presented by Naumann, Homewood’s current water bill cost is $47.54 monthly and $10.97 in fees. The fixed fees are $3.66 per month, which is low, he said. 
The amount of increase in water bills for Homewood residents depended on which of the three options the village would decide to implement, he said.  

Of the three options available, the board unanimously agreed to Option 2 raising the fixed fee based on meter size while keeping usage rates (per 1,000 gallons) the same for all residential and non-residential customers, he said.  

Option 1 would have applied a flat percentage increase of 7.75% for all users, while Option 3 would have used tiered rates based on usage levels, Naumann said.

“I’m in agreement with my colleagues, I think Option 2. I really liked Option 3 because of the lower cost, the lower impact to residents, but I think it also provides the most volatility and stability of the rates,” Trustee Phillip Mason said, adding, “there’s a lot of variables that can cause us not to reach what we predict, so I like Option 2.”

Now that the board has made a selection, Burns & McDonnell will complete a final report for the water rate study for the board’s approval at a future meeting, Zukowski said. 

Related stories:

• New pipes. Same water. (July 17, 2022).
• Water rate study looks for ways to fund lead line replacement (Dec. 16, 2024).
• Homewood holds hearing on lead line replacement project (April 26, 2025).

New boost