CWLP asking for significant water rate increases

City Water, Light & Power officials say water rate increases of 32% this year and 32% in 2025 are needed for state-required replacements of lead lines and to reduce the frequency of water main breaks, dredge Lake Springfield and improve the water division’s finances.

CWLP Chief Utility Engineer Doug Brown said the need for the increases for Springfield’s municipally owned utility was delayed for several years because of federal COVID-19 pandemic relief funds, budget cuts, loans from the electrical division and other one-time fixes.

“There are no more magic cuts we can make or other revenue sources we can use to balance the budget,” Brown told Springfield City Council members Jan. 31.

Brown said in an interview with Illinois Times: “We’ve been stretching the dollars for quite a few years. We got through COVID, but with the inflation that took place and with the lead service line requirements, it’s imperative now to move this forward.”

The last water rate increase was 13 years ago, in March 2011. The proposed hikes would match the total percentage increases phased in from 2008 to 2011.

The new rate increases would generate an additional almost $8 million in the fiscal year that begins March 1, and $10.4 million on top of that in the fiscal year that begins March 1, 2025.

Under the first year of the increase, the average residential customer’s monthly water bill, which equates to four units of usage, would rise by $4.19 – from $13.16 currently to $17.35. That’s an increase of about 14 cents per day, according to CWLP.

The bill would rise by another $5.55 in the second year, adding another 18 cents per day for each service connection.

The monthly commercial bill, for a customer using seven units of water as an example, would rise by slightly more than $21 – from $66.36 currently to $87.56 – in the first year. The second-year increase would add another $28 per month.

The two-year increase would raise water bills by 74% compared with current bills.

Applicable rate increases also would be passed on to CWLP customers in communities that include Jerome, Grandview, Loami, Southern View, Leland Grove, Rochester and the Sugar Creek Water District, based on the language in each service contract, Brown said.

Several Springfield City Council members have said they would favor reducing the proposed increase, scheduling smaller increases over perhaps a 10-year time period or adopting a tiered increase that charges water users in areas of the city with newer infrastructure more than in older parts of the community.

The options, which could be formally proposed at the council’s Feb. 13 committee of the whole meeting as amendments to a water-rate ordinance, would soften the financial impact of the increase, especially on lower-income residents, according to Ward 6 Ald. Jennifer Notariano.

She noted that utility bills typically represent a larger percentage of living expenses for the poor.

“The increase doesn’t sound like a lot, but folks are really getting squeezed right now, especially in the lower-income levels,” Notariano said. “I would like to see if there’s a way to make this more equitable.”

She noted that Springfield residents soon will pay higher bills for sewage treatment, as well. Beginning May 1, an increase approved by the board governing the Sangamon County Water Reclamation District, a separate unit of local government, will boost the average monthly residential bill for a Springfield customer by $1.60, with the current average bill of $23.68 rising to $25.28. That amounts to a 6.7% increase.

The water reclamation district’s annual rate increases are tied to the Consumer Price Index, or inflation rate, and additional charges related to capital improvements on combined wastewater and stormwater lines within the city of Springfield, according to the district’s executive director, Gregg Humphrey.

In addition to Springfield, the district serves communities that include Chatham, Rochester, Sherman, Jerome, Leland Grove, Grandview, Southern View, Curran and some unincorporated areas in Sangamon County.

The Springfield City Council is expected to vote Feb. 20 on the new city budget for fiscal 2025, which begins March 1, 2024. The first water rate increase would take effect for water use in March that is reflected on April CWLP bills.

Even with the rate increases, Springfield’s residential water rates this year would remain the lowest in the state for comparably sized and larger communities, including Chicago, Bloomington-Normal, Rockford, Champaign-Urbana, Peoria and Decatur, CWLP officials said.

If authorized by the Springfield City Council, the proposed increases would take effect in March 2024 and March 2025. After that, future rates would automatically rise based on the inflation rate.

More than half of the money generated by the proposed increases would be used to replace water mains and to replace lead service lines that run from the mains to the property lines of customers, according to Todd LaFountain, manager of CWLP’s $29 million-a-year water division.

The increases would allow the water division, which serves an estimated 150,000 people, to replace almost eight miles of water mains each year, or 1% of the 770 miles of mains in the distribution system, LaFountain said. One percent annually is the “best in class” industry standard for water main replacement, he said.

Some of Springfield’s water mains are 100 or more years old, and the slow pace of
replacement has led to between 100 and 120 breaks a year, mostly in older neighborhoods, LaFountain said. Breaks cause shutdowns of water service in certain parts of the city that can last hours or days.

Up to now, CWLP has been able to replace only 0.2% of mains annually, so the rate hikes would finance an almost fivefold increase in replacements, LaFountain said.

A state law that the General Assembly passed in 2021 will require CWLP and most other water utilities in Illinois to replace varying percentages of utility-owned lead lines per year, beginning in 2027, to remove the possibility of water supply contamination.

For CWLP, the annual amount of lead lines to be removed is at least 5%. CWLP will be required to comply with the law, and face potential enforcement actions if it doesn’t, even though the utility’s use of water-softening agents for at least 90 years has created a chemical barrier that prevents brain-damage-causing lead from leaching into water lines, LaFountain said.

The safety of the water supply has been backed up by regular testing, officials said.

Almost 20% of CWLP’s service lines, or 11,000 lines, were installed with building construction prior to 1930 and are suspected to contain lead, officials said.

More than 200 lines were replaced in 2023, and the city needs to increase the pace to comply with the law and to generate more interest in private contractors so there will be enough workforce capacity to replace pipes that extend from property lines to buildings, LaFountain said.

The city doesn’t own the service lines other than those that extend from water mains to property lines. But the city has historically used grants from the Illinois Environmental Protection Agency to help needy homeowners pay for new lines that extend to buildings. The city is looking for state funding to assist more homeowners in the future, LaFountain said.

The water division also needs the proposed rate increases to cover materials and chemicals, the costs of which are rising faster than the overall inflation rate, Brown said.

Rate increases would improve the water division’s cash flow situation so the city can be attractive to lending institutions and financial markets, he said.

That’s because he said the city would like to pay for water infrastructure improvements, such as a $50 million dredging project for the south end of Lake Springfield, west of Interstate 55, through low-interest borrowing associated with bond issues.

Without better cash flow, the water division wouldn’t qualify for favorable interest rates, Brown said.

Ward 3 Ald. Roy Williams said many residents of his ward can’t afford to pay $5 or $10 more per month for water.

He said a rate increase may be needed. “I’m looking at how to make this a better situation for poor people,” he said.

Ward 4 Ald. Larry Rockford, a retired CWLP maintenance supervisor, said his ward needs many infrastructure improvements. He said he is frustrated that city leaders waited so long to address the water division’s struggles but will support rate increases even though he may hear opposition from his constituents.

“I’m just tired of kicking the can down the road,” Rockford said. “I just want something to be done. We can’t keep pushing it off.”

Editor’s note: This story has been updated since it was first published online.

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