Submitted By
Robert Sproule, Public Works Director
Reviewed By
Ahmad M. Zayyad, Deputy Village Manager / Interim Director of Development Customer Services
Agenda Item Title
Title
Second Reading and Adoption of An Ordinance Amending Chapter 26 (“Water”), Article 2 (“Charges and Collections”), Section 26-2-2 (“Meter Charges”) of the Oak Park Village Code Regarding the Rates for Water and Sewer Services
End
Overview
Overview
This is the second reading of an Ordinance which proposes to change the fee charged for Water and Sewer services for 2024. Staff proposes to adjust the 2024 Water & Sewer rate according to the estimated Consumer Price Index. The rate is estimated at four (4) percent.
End
Recommendation
Recommendation
Adopt the Ordinance.
Background
In 2019, Baxter & Woodman provided a Water & Sewer Rate Study which provided a five-year view of the projected Water & Sewer Enterprise Fund through 2024. The projection included the current position of fund balance, at the time, as well as the proposed revenues and expenditures, including the Capital Improvement Program. Rates were based on the volume of water used (metered) per 1,000 gallons plus a fixed monthly charge for the size of water meter the customer has on their premises. The results of the Study and proposed fees were reviewed at a Finance Committee meeting on October 24, 2019. Three options were provided. Staff recommended and on November 18, 2019, the Village Board approved Option 3 which provided the most stable operating reserve balance (ORD 19-120). Option 3 included fixed rate increases and volumetric increases of 3%/3%/2%/1%/1% over the five-year period from 2020 through 2024.
It was noted that if expenditures change from those estimated, the Village Board could re-visit the rate structure for future years. The 2019 Water & Rate Study expenditures were based on an estimated annual two and a half percent (2.5%) increase to City of Chicago water rates over the next five years. Unfortunately, the City of Chicago increased their rates by five percent (5%) for the last two years and is estimated to increase the rate by at least four percent (4%) for 2024.
American Water Works Association recommends an operating reserve of twenty-five percent (25%) of the annual operating expenses. For the Village of Oak Park, that roughly equates to an operating reserve balance goal of two to three million dollars ($2-3M). With the current rate increase of one percent (1%), the Village will fall well below this recommendation.
Staff recommends a rate increase of four percent (4%) for 2024 to maintain a sufficient fund balance for the Village’s Water & Sewer fund.
Fiscal Impact
Fees collected for these services are the revenue source for the Water & Sewer Fund.
DEI Impact
N/A.
Alternatives
The Board can delay action to gain additional information.
Previous Board Action
A first reading of the Ordinance for 2024 rates was presented to the Village Board on November 6, 2023 (ORD 23-100).
Fees for Water & Sewer rates were last increased one percent (1%) on January 1, 2023 which was approved by the Village Board in November of 2019 (ORD 19-120).
Citizen Advisory Commission Action
N/A.
Anticipated Future Actions/Commitments
The Village Board may review the rates annually.
Intergovernmental Cooperation Opportunities
The Village is the only public water supplier for water and sewer services within the Village Corporate limits.