Evanston aldermen got some cost figures for extending the city’s water system to serve additional communities Monday night, but the size of the potential gain from the venture remained murky.
A presentation from Utilities Director Dave Stoneback said a consultant’s report shows that a pipeline buried in an open trench with enough capacity to serve about four new communites would cost about $230 million.
A bigger pipeline laid in a tunnel, which could serve several additional towns, would cost roughly $480 million.
Those numbers don’t include the cost of expanding the city’s treatment plant capacity, which Stoneback said hasn’t been calculated yet.
City officials anticipate that the cost of the pipeline would be financed by revenue bonds issued by the communities it would serve, and that Evanston would issue bonds to finance the plant expansion, which would be repaid by income from selling water to the additional towns.
Evanston, at least in theory, would profit from the project by earning a four percent margin on the water service it provided, as well as benefiting from depreciation charges and efficiencies of scale in operating the larger plant.
Those revenue streams would be in line with guidelines for setting rates established by the American Wter Works Association, Stoneback added.
While the presentation offered no detail on what those revenues would amount to, Mayor Elizabeth Tisdahl exhorted Stoneback as his presentation ended to “Go forth and make us a lot of money, Dave!”
The presentation provided no information about any possible downside to Evanston taxpayers, if the project should not be seen to completion or if the water customers were lured away to get their water from some other provider in the future.
Evanston has seen the opportunity to expand its water service blossom as Chicago has raised rates it charges suburbs it now supplies with water to levels that Evanston believes it can undercut.
But, in response to a question from Alderman Ann Rainey, 8th Ward, Stoneback said the water system expansion should not mean higher water rates for Evanston residents.
Stoneback said Lincolnwood is interested in doing an agreement with Evanston for water service separate from the joint plans being discussed with other towns, and that he believes a Licolnwood deal could be ready for City Council review by June.
He said he will meet with the largest potential additional customer, the Northwest Suburban Municipal Joint Action Water Agency, later this month to continue discussions with that group.
Top: Utilities Director Dave Stoneback presenting the water sales update to the City Council.