Utility Rates To Skyrocket

Crest Hill is set to raise water and sewer rates substantially. Overall revenue will increase by over 50%.

I recognize that Crest Hill's rates are currently very low and do not oppose raising rates if necessary. However, the city has not done an actual rate study. They merely projected how much they would take in if rates were raised and called that a rate study.

A real rate study would look at capital structure, operation costs, depreciation, and rate of return on the money that has been invested into the city utilities over the years. Other cities run their utilities as efficient businesses, but Crest Hill refuses to. They prefer to just raise rates arbitrarily. Instead, of creating a multi-year capital plan, they are just going to collect a lot of money and then spend it.

The State of Illinois would not allow an investor owned utility to raise rates without a formal rate study and would not allow it to operate under the logic of spend money and then raise rates randomly when more money is needed. It is time for the city to begin running the water and sewer utilities as businesses and begin to focus on efficiency can controlling costs.

Proposed Sewer Solution

I previously criticized the Mayor and City council of Crest Hill for not better assisting residents with sewer back flow problems and for giving them unhelpful suggestions. Now, I will be fair and propose how I think it can be done better.

First, I need to explain the current overhead sewer program. The City of Crest Hill has a 50/50 cost sharing program for overhead sewer installation. The homeowner hires a contractor to perform the work and pays them for the full cost of the work. The homeowner then submits a copy of the bill to the city. The city reviews the work to ensure it was completed correctly and if so will reimburse the homeowner for 50% of the cost up to a total reimbursement of $4,000.

My proposals will assume a continued 50/50 since I do not expect city officials to be willing to commit to anything more. In addition, there is some sensibility to the idea that homeowners should shoulder some of the cost since this improves the value of their home and is an improvement that has benefits regardless of the condition of the city's sewer system. I would also continue to have it to be a voluntary program.

My suggestion is to have the city coordinate an annual overhead sewer replacement program. The city would contact homeowners to determine who is interested in having an overhead sewer installed. The city would then go out for bids to get all of the work done. This would allow for a lower cost to be obtained. The city would pay half the cost and charge the other half the cost to the homeowners. Each homeowner could either pay the cost at that time or have a special assessment placed against their property allowing the cost to be paid off over a period of up to ten years at a reasonable interest rate. I think this would be more appealing to homeowners, less expensive, and allows for an alternative payment method.