No 'Zero' Tolerance for City Council: Water Rates Will Go up 5%, Sewer Up 4.25%

The City Council decided it was best to

And figure out how much to charge for water and sewer services going forward.

After a spirited and sometimes-emotional debate on Monday night, the council turned down a motion by Alderman Chuck Brown to hold the line on rate increases for the 2011-12 fiscal year.

Instead, it opted for the first half a Scenario 2, and called for a 5 percent increase in water rates and a 4.25 percent increase in sewer rates for 2011-12. The council held off a decision on rates for 2012-13.

Brown argued that maintaining a cash balance of $1.7 million—about where it stands now—or even the recommended $1.5 million was more than necessary. He noted that many of the fund expenditures were fixed bond payments, and the cash on hand was meant for emergencies.

"The average citizen would rather see the money in his pocket rather than our pocket," he said.

But City Administrator Mary McKittick pointed out that city consultant Spear Financial advised that a $1.5 million balance is "healthy" and a $1.25 million balance is "OK."

"You should never, ever dip into reserves to compensate for lack of revenues. That is, in financial terms, a black mark against our credit," she said. "They recommend strongly against doing that."

Fourth Ward Alderman Craig Maladra argued passionately against the idea of holding off on capital improvements or reducing the cash balance. He said it isn't prudent to base rates on the hope that "things may be better next year."

"We have to do this. If we draw reserves down, we are not strengthening our position. We are in fact weakening our position," he said. "We defer until tomorrow all the time, (but) as we defer today’s needs, they just get thrown onto a pile. We just can’t wish these things away. We've got to face up to the fact that this is stuff we need to do."

Second Ward Alderman Bob Piper said the 2011-12 rate increase would represent a small investment against what could be steeper increase later. And to emphasize his point, he slapped some dollar bills on the table in front of him.

"That’s about $3.38 (per month) worth of stuff. Don’t hit me up for $6 or $9 or $12 down the road," he said. "To spend down those reserves is completely irresponsible."

Piper said he also was concerned about the change in direction from the council, which had planned for a three-year rate increase to help cover the costs associated with improvements to the city's water treatment facility.

"If I were staff I’d be pulling my hair out," Piper said. " 'Go left, go right, go straight.' Geez, just make up your mind.

"A one-year outlook—to me that’s not why we’re here," Piper said.

Mayor Kevin Burns said he and other aldermen were prepared to take the heat for voting in favor of a rate increase and called the Monday-night decision "gut-check time."

Part of the problem is that water usage in Geneva last year was well short of expectations, so the city's revenue from water sales isn't keeping pace with its operating expenses and IEPA loan payments.

Second Ward Alderman Richard Marx said he didn't know what the solution might be, but the city needs a better answer for reducing the amount it owes the IEPA.

"You cannot have 60 percent go to your debt. It’s not working, and it’s not going to work. This 4 percent and 5 percent a year isn’t going to fix it," he said. "Every year since we brought that water plant in we’ve increased rates."

Mark Cox, 228 N. Fifth St., introduced himself to the City Council during the comments period as "the average citizen you’re talking about here."

"The economy’s bad; it happens. But before you pass more tax to the consumer, to me, (ask yourself) what are you doing? … The costs keep going up and up. I think people really need to hear more about where you’re making the cuts."

Dantino and Brown were the only two aldermen to vote in favor of the zero percent increase. On the motion to accept the 2011-12 rate increase, Flanagan, Dantino and Brown voted "nay." Piper, Maladra, Marx, First Ward Alderman Sam Hill and Fourth Ward Alderman Ron Singer voted "aye." Because two aldermen were absent, the mayor's vote was necessary for the motion to pass.

Burns voted "aye" and said further discussion on the rates and paying down the debt would be on the agenda and the priority list.

"Believe me, this is like Lysol," he said. "This thing will linger."