Wilmette water rates must climb to meet infrastructure needs, officials say

Wilmette water rates are likely going up, but officials are working to mitigate the impact on residents

The water rate discussion at the Village Board’s regular meeting on Oct. 27 was prompted by concerns that the current water rate may not be enough to cover future infrastructure projects.

Erik Hallgren, assistant village manager, said the current retail water rate, which residents pay, has been $2.75 per 100 cubic feet (CCF), since 2019. Retail bills also include a quarterly fee based on the size of the water meter. That rate could more than double by 2029.

He said the water rates fund the maintenance and operation of the Village’s water plant, water reservoir, meter maintenance, and the water distribution system. This includes providing water to not just Wilmette but also neighboring communities Kenilworth, Glenview and Golf, or approximately 150,000 people.

According to Hallgren, over the past 30 years, there has been a “significant decline” in water usage, and looking specifically at the last 10 years, “We have seen a relatively stable consumption on a retail basis at around 1.1 to 1.2 million CCF.”

At the current rate, though, staff projects that the Village won’t have enough money to fund $114 million in planned capital improvements through 2029. Among the projects include a new water intake into Lake Michigan, continued replacement of lead service lines and new water mains, many of which are reportedly between 70 and 100 years old.

Hallgren said an increase in the revenue structure would cover the expected shortfall.

Earlier this year, Hallgren said the Village contracted Reftelis, a government consulting firm, to conduct a water rate study and to analyze different rate structures, such as separating out a lead-service fee at different percentages.

Trustees, though, seemed to support using a 100% volumetric rate, or charging on a per CCF basis. The analysis showed that rate at $3.60 per CCF in 2027, $4.85 in 2028 and $6.55 in 2029, the latter of which would be more than double the current cost-per-CCF rate.

Hallgren said based on a study, switching to a volumetric rate would not have any major impacts on the Village.

“In a low-consumption year, based on how we structure the rate, we only have a risk of around $15,000, and this is about half a percent in 2027,” Hallgren said. “Even if we go out into 2029, our revenue risk, based on how we structure the rate, is around $42,000, which is just about 1 and a half percent of our overall retail consumption numbers.”

Even running a “worst-case scenario” analysis showed only a 1-2% revenue risk.

“That was something that we had not necessarily expected,” Hallgren said. “We thought that the risk was going to be a little bit higher, but it was just an interesting finding as we went through this.”

Refetlis also studied what switching to a volumetric rate would mean for residential bills.

Hallgren said the average consumer, using 18 CCF quarterly, could see their quarterly bill go from $49.50 to $64.80 in 2027, a jump of 31%.

If the Village does use a purely volumetric charge, rather than split the rate with a lead-service fee, residents who use a low amount of water are estimated to save about $30 on an annual basis in 2027. High consumers, he said, could pay around $19 more annually next year.

Projecting out further, Hallgren said with volumetric rather than a hybrid structure, low consumers could save around $66 annually by 2029, with higher consumers paying $41 more.

The Village Board showed support for the volumetric rate moving forward, with Village President Senta Plunkett noting that switching to volumetric wouldn’t be that much of an overall change.

“Plus, I think this is more equitable,” she said. “The more water you use, you pay for it.”

Trustee Gina Kennedy also said that if the Village experiences a slight shortfall, there are ways of covering it.

“It’s not like if we incur that risk that we can’t pay it off with some reserves,” she said before voicing her support for switching to a volumetric rate.

Village Manager Mike Braiman told trustees that the proposed changes would be discussed further at the Village Board’s budget workshop on Thursday, Oct. 29.

From there, he said the budget is expected to be introduced at the Nov. 10 Village Board meeting, followed by budget adoption, proposed rate introductions and tax levy introduction happening on Nov. 24.

Final rate adoptions are expected at the board’s Dec. 8 meeting.

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