Homewood water rates are going up. 

The Homewood board approved a water rate study at its Sept. 30 meeting and set new rates for 2026 and 2027.

Finance Director Amy Zukowski said the rate hike is needed to cover a range of rising expenses, including equipment replacements, debt service, and capital improvements. Not least among those is the 10-year lead line replacement project, which could cost at least $70 million.

The federal government is requiring all communities to replace lead service lines, and while some of the costs will be covered by grants — the village will receive $4.1 million for the initial phase — funding in the future is uncertain. 

The water rate study completed by engineering firm Burns & McDonnell recommended a 7.75% increase in rates for water usage each year for the next decade. The lead service line project by itself requires a 3.25% increase in rates, according to the study. 

The firm offered the board three options for structuring the increase, and this summer trustees chose the option that includes a new flat rate fee based on meter size. About 67% of residential customers have the smallest meter size, five-eighths or three-quarters of an inch. Their flat rate will be $3.94 per month in 2026 and $4.25 in 2027. About one-third of customers have a one-inch meter. Their flat rate will be $5.52 in 2026 and $5.95 in 2027.

For 2026, the average residential customer who uses about 4,000 gallons per month will see a total increase of about $2.50 per month, or $30 dollars for the year.

Water usage is billed per 1,000 gallons.

The village’s water and sewer operates from an enterprise fund, which means it has to pay its own way without getting money from the general fund. 

Zukowski said water rates would be assessed again before 2028 to see if the new rates are providing adequate income.