G-1066 - 11/10/2015 - WATER - Ordinances Supporting Documents ITEM 9.B. 1)
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AGENDAITEM
Regular Board of Trustees Meeting
of
November 10, 2015
SUBJECT: Water Rate Adjustment
FROM: Doug Patchin, Interim Public Works Director
BUDGET SOURCE/BUDGET IMPACT: Water Fund Revenue
RECOMMENDED MOTION:
Option 1: I move that the Village Board approve ORDINANCE G-1065, An Ordinance
Amending Chapter 5 Of Title 8 Of The Village Code Of The Village Of Oak Brook, Illinois
Relating To Water Charges (Option #1)
Option 2: I move that the Village Board approve ORDINANCE G-1066, An Ordinance
Amending Chapter 5 Of Title 8 Of The Village Code Of The Village Of Oak Brook, Illinois
Relating To Water Charges (Option #2)
Background/Histol .
On October 27, 2015, a Water Rate Study was presented to the Board setting forth strategy for
future rate structures. The conclusions of the study were:
- The current rates and water cash fund balance are inadequate to maintain the water
system's future financial health.
- A 5% rate increase coupled with $5 million in debt is recommended to increase the
cash balance in the water fund. The Village should look into funding the water
account by 2017.
- The non-revenue water percentage has increased over the years to a significant
amount. Current value of non-revenue water is estimated to be approximately $1
million annually. Reducing this amount would produce substantial savings.
- The capital program should provide for balanced capital expenditures for needed
projects. The current program has significant expenses in some years and no expenses
in others resulting in large changes to the water fiend balance. It is recommended to
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update the 10-year capital program based on the current and anticipated needs of the
water system.
- The Village may incur$5 million debt in the form of bonds or a State Revolving
Loan Fund to pay for capital projects.
- The water fund cash balance should be maintained around $3 million at all times as a
backup of$9 to $11 million for annual system expenses over the next five (5)years
and to build up a reserve for future capital expenses.
- Currently Public Works is looking at steps to reduce non-revenue water percentages
from 17%today, and 12%by 2016.
- Engineering is looking at future water main replacement projects to try and balance
out the expense from year to year.
Option 1
Raise the rates by 5% annually for the next five (5) years combined with$2 million debt in 2017
and a$3 million debt in 2018.
At the October 27th Board meeting, mention was made that rather than take on debt to fund the
capital projects the Village could use infrastructure money to fund the project. Infrastructure
money is necessary to fund major road improvement projects (shown in the Five Year Plan). If
the Village uses money for water system improvements, we would need to postpone scheduled
road improvements, or incur debt to pay for these road improvements.
In order to keep the Water Fund solvent, the recommended water rates are:
Water Rates 2015 2016 2017
Annual increase 5% 5%
Fixed Charge $ 7.33 $ 10.00 $ 10.00
$/customer/month
Resident Rate $ 7.73 $ 8.12 $ 8.52
$/1000 gal
Non-Resident $ 9.13 $ 9.59 $ 10.07
$/1000 gal
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2015.doc
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Option 2•
After the October 27th Board meeting, staff requested that American Infrastructure
Technologies, LLC (ATI), look at including the $5 million debt into the rate structure over the
next five (5)years. The water rates would increase by 10% for FY 2016 and 2017, and 7% for
FY 2018—2020.
Water Rates 2015 2016 2017
Annual increase 10% 10%
Fixed Charge $ 7.33 $ 10.00 $ 10.00
$/customer/month
Resident Rate $ 7.73 $ 8.50 $ 9.35
$/1000 gal
Non-Resident $ 9.13 $ 10.04 $ 11.05
$/1000 gal
The difference between the rates (5%versus 10%) is paying an additional $.38 per 1,000 gallons
for residents and $.45 per 1,000 gallons for non-resident. If Option 2 is selected the resident rate
would increase $.77 per 1,000 gallons compared to the current 2015 rate and the non-resident
rate would increase $.91 per 1,000 gallons. The fixed charge would increase $2.67 per month for
all customers under both options.
For a resident with a consumption of 10 per 1,000 gallons, their water bill is $91.96 in 2015
(includes fixed charge). If we use Option#1 in this example, the customer's bill would be $101
and $105 with Option#2 (includes fixed charge). The customer would have an increase in their
water bill of$9.00 with Option#1 and $13.00 with Option#2.
For a non-resident, with a consumption of 10 per 1,000 gallons,their water bill is $106.00 in
2015. If we use Option 91 in this example, the customer's bill would be $116.00 and $120.00
with Option#2. The customer would have an increase in their water bill of$10.00 with Option
#1 and $14.00 with Option#2.
Recommendation:
In order to keep the Water Fund solvent and plan for needed capital improvements to the water
system,the recommendation is to increase the water rates. If the consensus of the Village Board
is not to take on future debt, option 2 would be the best option in order to plan for major water
capital improvements scheduled in 2017—2020.
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ORDINANCE 2015-WA-G-1065
AN ORDINANCE AMENDING CHAPTER 5 OF TITLE 8 OF THE
VILLAGE CODE OF THE VILLAGE OF OAK BROOK, ILLINOIS
RELATING TO WATER CHARGES
(OPTION#1)
WHEREAS, the President and Board of Trustees of the Village of Oak Brook, Illinois have
heretofore, by ordinance established rates, fees, and service charges for water usage; and
WHEREAS, the President and Board of Trustees deem a revision of the water rates, fees, and
charges, and the passage of this Ordinance to be in the best interest and in pursuance of the general
welfare of the Village;
NOW, THEREFORE, BE IT ORDAINED BY THE PRESIDENT AND BOARD OF TRUSTEES OF
THE VILLAGE OF OAK BROOK, DU PAGE AND COOK COUNTIES, ILLINOIS as follows:
Section 1: Recitals. The foregoing recitals are hereby incorporated into, and made a part of, this
Resolution as the findings of the President and Board of Trustees of the Village of Oak Brook.
Section 2: Section 8-5-2-F of Chapter 5, "Fees and Charges," of Title 8, "Public Works," of the
Village Code is hereby amended further to read as follows:
F. Water Turn On Charge: Turning on water following the interruption of service shall be subject
to a charge of fifty dollars ($50.00) during normal working hours and eighty one hundred
and five dollars ($85:00146144)after normal working hours. Notwithstanding the previous
sentence, turning on water following the discontinuance of service pursuant to provisions of
section 8-2C-4 of this title shall require the payment of a two hundred dollar($200.00) charge.
Section 3: Section 8-5-2-G of Chapter 5, "Fees and Charges," of Title 8, "Public Works," of the
Village Code is hereby amended further to read as follows:
G. Water Consumption Charges
1. A monthly service charge of seven ten dollars and thirty-three=cents ($7-.33$14..40)
per customer account is hereby imposed, effective for any billing periods after January
1, 2015 2M.
2. Effective January 1, 2015 2016 water shall be charged at the rate of seven eight
dollars and seventy-three twelve cents($7-.7-3$.1.2) per thousand gallons for
customers in the corporate limits of the Village of Oak Brook and at the rate of nine
dollars and thirteen f cents($043 9M)for customers outside the corporate
limits of the Village of Oak Brook.
3. Effective January 1, 2015 2016 water drawn from the hydrant at 3003 Jorie Boulevard
shall be charged at a rate of nine dollars and thirteen fi cents ($0-43 9-0) per
thousand gallons.
Additions are bold and double-underlined; „re S1r__L through
Ordinance 2015-WA-G-1065
Water Rates 2015
Page 2 of 2
Section 4: Severability. If any provision of this Ordinance or part thereof is held invalid by a court
of competent jurisdiction, the remaining provisions of this Ordinance shall remain in full force and effect,
and shall be interpreted, applied, and enforced so as to achieve, as near as may be, the purpose and
intent of this Ordinance to the greatest extent permitted by applicable law.
Section 5: Effective Date. This Ordinance shall be in full force and effect beginning on January
1, 2016 and after passage, approval and publication, as provided by law.
APPROVED THIS 10th day of November, 2015.
Gopal G. Lalmalani
Village President
PASSED THIS 10th day of November, 2015.
Ayes:
Nays:
Absent:
ATTEST:
Charlotte K. Pruss
Village Clerk
Additions are bold and double-underlined;d letie,.ns are_ir__L through
ORDINANCE 2015-WA-G-1066
AN ORDINANCE AMENDING CHAPTER 5 OF TITLE 8 OF THE
VILLAGE CODE OF THE VILLAGE OF OAK BROOK, ILLINOIS
RELATING TO WATER CHARGES
(OPTION#2)
WHEREAS, the President and Board of Trustees of the Village of Oak Brook, Illinois have
heretofore, by ordinance established rates, fees, and service charges for water usage; and
WHEREAS, the President and Board of Trustees deem a revision of the water rates, fees, and
charges, and the passage of this Ordinance to be in the best interest and in pursuance of the general
welfare of the Village;
NOW, THEREFORE, BE IT ORDAINED BY THE PRESIDENT AND BOARD OF TRUSTEES OF
THE VILLAGE OF OAK BROOK, DU PAGE AND COOK COUNTIES, ILLINOIS as follows:
Section 1: Recitals. The foregoing recitals are hereby incorporated into, and made a part of, this
Resolution as the findings of the President and Board of Trustees of the Village of Oak Brook.
Section 2: Section 8-5-2-F of Chapter 5, "Fees and Charges," of Title 8, "Public Works," of the
Village Code is hereby amended further to read as follows:
F. Water Turn On Charge: Turning on water following the interruption of service shall be subject
to a charge of fifty dollars ($50.00) during normal working hours and eighty five one hundred
and five dollars($85.00 105,00) after normal working hours. Notwithstanding the previous
sentence, turning on water following the discontinuance of service pursuant to provisions of
section 8-2C-4 of this title shall require the payment of a two hundred dollar($200.00) charge.
Section 3: Section 8-5-2-G of Chapter 5, "Fees and Charges," of Title 8, "Public Works," of the
Village Code is hereby amended further to read as follows:
G. Water Consumption Charges
1. A monthly service charge of seven ten dollars and thirty twee no cents ($7-.33$10.40)
per customer account is hereby imposed, effective for any billing periods after January
1, 2015 206.
2. Effective January 1, 2010 2915 water shall be charged at the rate of seven eig
dollars and seventy ee M cents ($7-73 8.50) per thousand gallons for customers in
the corporate limits of the Village of Oak Brook and at the rate of nine ten dollars and
thirteen four cents ($ 310.94)for customers outside the corporate limits of the
Village of Oak Brook.
3. Effective January 1, 2015 2016 water drawn from the hydrant at 3003 Jorie Boulevard
shall be charged at a rate of nine ten dollars and thirteen four cents 10,04) per
thousand gallons.
Additions are bold and double-underlined;deletiong are struck th^u^"
Ordinance 2015-WA-G-1066
Water Rates 2015
Page 2 of 2
Section 4: Severability. If any provision of this Ordinance or part thereof is held invalid by a court
of competent jurisdiction, the remaining provisions of this Ordinance shall remain in full force and effect,
and shall be interpreted, applied, and enforced so as to achieve, as near as may be, the purpose and
intent of this Ordinance to the greatest extent permitted by applicable law.
Section 5: Effective Date. This Ordinance shall be in full force and effect beginning on January
1, 2016 and after passage, approval and publication, as provided by law.
APPROVED THIS 10th day of November, 2015.
Gopal G. Lalmalani
Village President
PASSED THIS 10th day of November, 2015.
Ayes:
Nays:
Absent:
ATTEST:
Charlotte K. Pruss
Village Clerk
Additions are bold and double-underlined;deletions aFe StFUGk thmugh.