Water rates are likely to rise in Elgin next year, although not as much as originally anticipated, as will sewer rates.
The city’s proposed budget, which is currently under review by city councilmen, is calling for a 7 percent hike instead of the projected 9 percent. If approved, water rates would be $4.74 per 1,000 gallons.
Chief Financial Officer Colleen Lavery said water consumption did not decline as much as expected in 2010, which helped revenues. Nearly all of the revenue for the water fund comes from the sale of water to its customers, which include Sleepy Hollow and Bartlett, in addition to its own residents.
The city also has saved money by not filling the positions of two employees who took early retirement options.
Councilman Mike Warren asked if a 6 percent increase would be possible, but Lavery said that would mean four years of expenditures exceeding revenue.
“Seven percent for this year is necessary and the reason being is, if you lower it this year you compound it 1 percent going throughout the plan,” she said.
Councilman Richard Dunne said the city’s system does not provide incentives to conserve water and asked if the city could consider a plan that locked in rates for people who stay below a certain consumption level.
“For people on fixed income, for people who are unemployed, for people who are at the lower levels of our income right now, it’s very easy for them to say I can budget for five years as long as my rate doesn’t go up as long as I keep my consumption (low),” he said.
City Manager Sean Stegall said because the city relies on revenue from consumption, it would be difficult to implement such a change.
“Disincentives … will work, which will force us to … have a larger reserve to smoothe out those rough periods,” he said.
The proposed 2011 budget also calls for a 7 percent increase in sewer rates, which would bring them to $1.43 per 100 cubic feet of water.
The overall city budget for 2011 is $274.5 million, about 1 percent less than last year. It does not call for an increase in the property tax rate.
