COW Quick Story: Task Force Says It's Time to Re-Set Geneva's Water, Sewer Rates

A task force made up of three aldermen and four citizens told the City Council Monday night that it's time to come up with a new formula for setting Geneva's sewer and water rates.

And most likely, that forumla will include a higher base rate plus per-gallon consumption.

The council Committee of the Whole recommended accepting the task force's report, which calls for hiring a consulting firm to come up with a fairer and less-volatile rate system.

"We recognize that the current pricing model is inadequate," the task force said in a prepared statement, read by task force member Joe Stanton.

The full text of the statement appears below.

The task force was created by Mayor Kevin Burns, in part because the city keeps having to adjust its water and sewer rates each year. Generally, when it's hot and dry and the city's 8,000 or so households use more water, rates can be pretty stable year over year. But when consumption is down, rates can jump.

The City Council voted in March for a and a 4.25 percent increase in sewer rates for 2011-12. 

The challenge in a nutshell is this: The city is still paying for a state-of-the-art, $22 million water-treatment facility that opened in 2008 as well as expansion of the wastewater treatment plant. At the same time, users are conserving water and the city is no longer growing as it was in 1985, when the present rate structure was put in place.

"We can’t count on growth, we can’t count on impact fees," said task force member Steve Anderson, 521 West Lane. "(But we) need to make sure this thing is sustainable and sound in a financial way ... When you turn on the faucet, you expect water to flow out of it."

Fifth Ward Alderman Craig Maladra, who chaired the task force, said it might cost around $40,000 for a comprehensive evaluation of the rate structure.

Task force members agreed that residents should pay a base rate plus a rate per gallon. 

"The only differences we have is where to put that base rate," Stanton said. "We’ve agreed as a task force it needs to  be increased ... You can’t pick up a newspaper without seeing other communities—whether it's Aurora or Chicago— raising the rates."

At $1.39 per meter, Geneva’s base rate is among the lowest in the area, according to the task force report.

First Ward Alderman Chuck Brown commended Maladra for chairing the task force, which he said was sometimes like herding cats. Brown said he agreed with the task force's overall conclusions, although he wasn't sure a higher base rate would be a good idea because "large users win and small users lose" in that scenario.

"I was certainly one of the louder cats in the discussion," he said.

Water & Wastewater Task Force Report to the Committee of the Whole

Mayor Burns established the Water & Wastewater Task Force to investigate the current structure and level of Geneva’s water and sewer rates, and to assess the suitability of alternative rate structures for meeting the long-term obligations of the utility.

Having met regularly since Sept. 28, we conclude that Geneva has a well-run water utility and a financially sound water fund. The budget is balanced, and reserves are approaching levels specified by council policy.

That said, we recognize that the current pricing model is inadequate. The base rate component of the model was established as part of a rate study done in 1985 and covers only the cost of meter reading and replacement. At $1.39 per meter, Geneva’s base rate is among the lowest in the area.

In the 26 years since that study, many factors have changed. Construction of a state-of-the-art Drinking Water Treatment Plant; expansion of the Waste Water Treatment Plant; declining growth as the city nears buildout; and improved public conservation. Throughout all this change, we have held the base rate flat. The result is an increasingly volatile revenue stream, offset by more frequent adjustments to the overall rate. Attempts to minimize rate increases have resulted in staff reduction and deferred capital investment.

We feel that were this pattern to continue, the financial health of our water utility and its infrastructure will be weakened. We feel that a new or modified model is needed—a model that will encourage conservation without impeding industrial development and also reduce the volatility of overall rates, lending stability as the effectiveness of conservation measures continues to improve.

The Water & Wastewater Task Force appreciates the foresight of Mayor (Kevin) Burns in providing the opportunity for members of the community, council and staff to re-examine this enterprise fund. Having done so, the Task Force recommends that city staff prepare a request for qualifications (RFQ) and proceed with a selection process to engage consulting expertise for a comprehensive rate and/or structure study which will serve as the foundation for the new model in the same way the 1985 study formed the basis of rate decisions to date.