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Rate study recommends raising sewer, water rates

Published: Monday, Aug. 11, 2014 11:58 p.m. CDT

McHENRY – Proposed increases to the city’s water and sewer rates would put a larger share of the burden on heavy users, the city’s engineers told the McHenry City Council on Monday evening.

The engineers, Chad Pieper and Ed Coggin of HR Green, presented the council with the results of a rate study the city had hired them to conduct in light of revenues falling short of department costs and planned infrastructure improvements.

Rates would need to rise for both sewer and water users, the study concluded. But the City Council has a choice on how it distributes the annual increases: a flat increase across the board or a series of increases depending on the user type’s strain on the system.

The cost to provide a thousand gallons of water to a residential user is less than it is for an industrial user, Pieper said. An industrial user has a higher peak usage, which means the city has to have the infrastructure to handle that peak whether or not the user is running at that peak – and paying for it.

The council was leaning toward the weighted increases during discussions Monday evening, but a final vote actually raising rates won’t happen until December or January.

For water service, all users currently pay a minimum payment of $12.44 each two-month billing cycle, which covers the first 4,000 gallons. Each subsequent 1,000 gallons costs $3.11.

Under the proposed rate increase the council is leaning toward, the base fee would separate from the per gallon charge, meaning a residential user could pay $13.06 each two-month billing cycle the first year of the proposed five-year-plan plus $3.42 for each thousand gallons of water they use.

An industrial user would pay the same minimum charge, which is proposed as a 5-percent increase each year, but the usage rate would be higher, $4.04 in the first year and $8.88 in the fifth.

For sewer service, users – who also include the residents of McCullom Lake – also pay a flat fee of $35.11 plus debt service fees and plus $3.49 per thousand gallons every billing cycle.

Under the proposal for sewer rates, the flat fees would stay the same, but the rates based on usage would climb varying amounts.

A residential user would see their rate climb 6 percent to $3.70 in the first year, while an industrial user would see it increase 2 percent to $3.56 in the first year.

Sewer users also would see a new debt service fee tacked on to cover the cost of financing the consolidation of and improvements at the South Wastewater Treatment Plant.

The city is planning on going out to bid on the project, which is estimated to cost $28.6 million, in January with work starting in April, Coggin said.

The proposed increases would keep water rates below the average of rates in surrounding communities, but the sewer rates would kick rates above the average.

Several aldermen requested that staff look into why some communities had such comparatively low rates, and that information will be presented to the council when the rates come back up before the council in December or January, City Administrator Derik Morefield said.

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