City staff says Evanston’s combined water and sewer rate needs to increase nearly 85% by 2034.
They told the Finance and Budget Committee Tuesday night that those increases are required to cover the costs of replacing lead service lines and aging water mains.
Under a recently adopted state law the city must replace all of its more than 11,000 lead service lines by 2047.
City staff says the average cost per foot of replacing a lead service line has risen from $648 to $912 in recent years.
And while the city has been replacing 1.5 miles of its 156 miles of water mains each year in recent years, staff says that replacement rate needs to more than double to 3.2 miles per year to avoid ending up two decades from now with many mains far beyond their maximum life expectancy of 120 years.
A staff memo estimated that an average residential customer, using 120,000 cubic feet of water per year, would see their annual bill increase from $769.20 this year to $1,417.20 by 2034 under the plan.
As a result of major, and expensive, improvement projects made in the recent past, staff says the city’s sewer system is in relatively good shape and the forecast doesn’t anticipate any sewer rate increases.
The staff report also challenged suggestions by some committee members, including Ald. Clare Kelly (1st), that the city could reduce the existing reserves in the water fund and substantially reduce its issuance of bonds for water and sewer capital projects by paying for them with cash.
The reserves, Water Production Bureau Chief Darrell King said in a memo, are necessary to qualify for Illinois Environmental Protection Agency loans for major water projects — which carry interest rates roughly half the level city city would have to pay if it issued general obligation bonds.
And, King’s memo said, to cut the size of a planned $26 million bond issue in half would require an immediate 130% water rate increase.
Committee members appeared to agree on the need for the water rate hikes.
“I think everybody would agree,” Livingston said, that the lead service lines need to be replaced and the pace of replacing aging water mains also needs to increase.
“It’s almost like a pension problem,” he added, referring to the city’s underfunded public safety pensions, “we need to measure the problem and come up with a solution that works.”
Noting that the city had held the combined water and sewer rate flat in recent years, Livingston said, “artificially holding the rate flat was a mistake, now we’ve got to play catchup.”
Ald. Jonathan Nieuwsma (4th) said the water and sewer system “is one of the most fundamental services of government,” adding that he fully supported increasing the pace of water main replacements.