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Council Approves Restructure of Water Rates

At their meeting on November 9, 2010, the Village Council unanimously approved a measure to restructure water fees and the manner in which water bills are calculated.  Downers Grove water customers will see these changes reflected in bills received after January 1, 2011.  

Charges applied to water accounts will be expressed as a combination of the number of units consumed per billing cycle and a new fixed charge that is based on the size of the property's water meter.

Consistent with current rates, water customers within the Village limits will be charged $3.30 per unit of water, which is equal to 750 gallons.  Unincorporated customers will be charged $3.80 per unit.

Accounts will be assessed a bi-monthly fixed charge based on meter size, as follows:

 

Table 1: Meter sizes and new fixed rates.
Meter Size Fixed Charge Applied to Account
** 5/8" $8.25
1" $12.40
1 1/2" $41.25
2" $66.00
3" $123.70
4" $206.15
6" $412.30
10" $989.50

** MOST single family homes have a 5/8" meter.

In April 2010, the Village hired Municipal and Financial Services Group (M&FSG), a firm with expertise in the financial needs of water utilities.  They completed a water rate study to evaluate current water rates and make recommendations to ensure that adequate funding is available for the current and future operation of the Village's water system.

Providing clean, safe and reliable drinking water is a fundamental Village service and the continued financial viability of the water system is a top priority.  In order to pay for the water received and properly maintain the system, water fund revenues need to increase by 14% in each of the next three years.

The study identified the annual revenue requirements of the water system and compared those requirements with the annual revenues projected to be collected with current water rates.  If the Village maintains water pricing at the current level, there will be a $2.75 million deficit by 2011 which will increase to almost $5 million by 2015.  Put simply, the expenses needed to properly maintain the water system exceed the water revenues currently collected by the Village.

There are three main reasons causing the need for change:

  • People are using less water. Water consumption has declined by about 1% annually over the past five years and is projected to continue along this trend in the future.
  • The cost of water is increasing. The price of water that the Village buys from the DuPage Water Commission has significantly increased and is expected to continue at arate of 10% per year.
  • The water system infrastructure is aging. Large portions of the system have reached their useful life. This includes water main pipes that deliver water to homes and businesses, as well as water towers. A significant investment is needed to avoid disruptions in water service due to failed equipment.

The Village will annually review further recommendations made in the Final Water Study Report  prepared by M&FSG.