O-1025-96 10/14/96ITEM V.B.1
VILLAGE OF LEMONT
ORDINANCE NO. ) o a
AN ORDINANCE AMENDING THE LEMONT MUNICIPAL CODE
TO INCREASE THE RATES CHARGED FOR WATER USAGE
ADOPTED BY THE
PRESIDENT AND BOARD OF TRUSTEES
OF THE VILLAGE OF LEMONT
This ILA' day of October , 1996.
Published in pamphlet form by
authority of the President and
Board of Trustees of the Village of
Lemont, Counties of Cook, Will, and
DuPage, Illinois this 941
day of October , 1996
ORDINANCE /0 c
ORDINANCE AMENDING THE LEMONT MUNICIPAL CODE
TO INCREASE THE RATES CHARGED FOR WATER USAGE
WHEREAS, the Village of Lemont has sold $2.5 million in alternate revenue bonds
to finance the expansion of the deep well system which provides water to the community;
and
WHEREAS, the annual average debt service on the bond issue requires payment of
approximately $215,500 over the next 20 years; and
WHEREAS, the Village has determined it is necessary to implement a phased
increase in water rates which will occur on January 1, 1997 and January 1, 1998; and
WHEREAS, the revenue generated from this water rate increase will directly fund
repayment of the bonds.
NOW, THEREFORE BE IT ORDAINED by the President and Board of Trustees of
the Village of Lemont that:
SECTION 1: Chapter 13.08.060 (A) of the Lemont Municipal Code is hereby
amended to increase water rates effective January 1, 1997 as follows:
A. Water service effective after December 31, 1996 shall be charged
in accordance with the following schedule:
1. Single family residence, twenty -two dollars minimum charge, plus two
dollars and seventy -five cents per one thousand gallons for each one
thousand gallons in excess of four thousand gallons;
2. Single business building, twenty -two dollars minimum charge plus two
dollars and seventy -five cents per one thousand gallons for each one
thousand galls in excess of four thousand gallons;
3. Multiple - family residence, sixteen dollars and fifty cents minimum
charge per dwelling unit, plus two dollars and seventy -five cents per
one thousand gallons for each one thousand gallons in excess of a four -
thousand gallon allowance per dwelling unit;
4. Multiple business building, sixteen dollars and fifty cents minimum
charge per business unit, plus two dollars and seventy -five cents per
one thousand gallons for each one thousand gallons in excess of a four -
thousand gallon allowance per business unit;
5. Residential- business building, $16.50 dollars minimum charge per
residential or business unit, plus two dollars and seventy -five cents per
one thousand gallons for each one thousand gallons in excess of a four -
thousand gallon allowance per residential or business unit.
SECTION 2: Chapter 13.08.060 (A) of the Lemont Municipal Code is further
amended to increase water rates effective January 1, 1998 as follows:
A. Water service effective after December 31, 1997 shall be charged in
accordance with the following schedule:
1. Single - family residence, twenty -four dollars and twenty cents minimum
charge, plus three dollars and three cents per one thousand gallons for
each one thousand gallons in excess of four thousand gallons;
2. Single business building, twenty -four dollars and twenty cents minimum
charge plus three dollars and three cents per one thousand gallons for
each one thousand gallons in excess of four thousand gallons;
3. Multiple - family residence, eighteen dollars and fifteen cents minimum
charge per dwelling unit, plus three dollars and three cents per one
thousand gallons for each one thousand gallons in excess of a four -
thousand gallon allowance per dwelling unit;
4. Multiple business building, eighteen dollars and fifteen cents minimum
charge per business unit, plus three dollars and three cents per one
thousand gallons for each one thousand gallons in excess of a four -
thousand gallon allowance per business unit;
5. Residential- business building, eighteen dollars and fifteen cents
minimum charge per residential or business unit, plus three dollars and
three cents per one thousand gallons for each one thousand gallons in
excess of a four - thousand gallon allowance per residential or business
unit.
This Ordinance shall be in full force and effect from and after its passage, approval
and publication in the manner provided by law.
All Ordinances or parts of Ordinances in conflict herewith shall be and the same are
hereby repealed.
The Village Clerk of the Village of Lemont shall certify to the adoption of this
Ordinance and cause the same to be published in pamphlet form.
PASSED AND APPROVED BY THE PRESIDENT AND BOARD OF TRUSTEES OF
THE VILW OF LEMONT, COUNTIES OF COOK, WILL AND DU PAGE, ILLINOIS
on this / 'f day of , 1996
Barbara Buschman
Alice Chin
Keith Latz
Connie Markiewicz
Richard Rimbo
Ralph Schobert
Approved by me this / Vt day
Attest:
AYES NAYS PASSED ABSENT
V
v
CHARLENE SMOLLEN, Village Clerk
te, Ata elk. ... ,.....
C /Mr '16"17r* ESKI, Village ' resident
1996
ENE SMOLLEN, Village Clerk
Mayor
Richard A. Kwasneski
Village Clerk
Charlene M. Smollen
Administrator
Steven A. Jones
LEMONT
Village of Faith
418 Main Street • Lemont, IL 60439 -3788
(630) 257 -1550
Fax (630) 257 -1598
email: vlemont@aol.com
MEMORANDUM
TO: Mayor & Village Board
FROM: Steve Jones, Village Administrator
SUBJECT: Water Rate Increase
DATE: September 3, 1996
Trustees
Barbara Buschman
Alice Chin
Keith Latz
Connie Markiewicz
Rick Rimbo
Ralph Schobert
As you know the Village of Lemont issued $2.5 million in bonds for the construction of well
#5 in March 1996. As stated prior to the issuance, we need to raise our water rates to
provide for the annual debt service payments. Since we now know our interest rate and
annual costs, we can proceed with final review of this matter. This report is intended to
provide the Village Board with the background and financial requirements to accomplish the
task at hand.
I. DEBT SERVICE REQUIREMENTS
The $2.5 million bond issue will result in annual debt service payments as outlined in exhibit
A. These payments will be required for a 20 year period beginning on May 1, 1997, and
they will need to be paid for utilizing new revenues. Utilizing a simple calculation of our
annual debt service (average of $215,500) divided by our current revenues ($880,000)
equates to a water rate increase of 24.4 %. However, the final increase can be less than this
amount due to the fact growth and higher consumption patterns are likely to continue
resulting in higher system revenues.
II. PREVIOUS WATER RATE INCREASE DISCUSSIONS
The Village has been discussing this issue since the Lake Water vs. Well Water decision
occurred in mid -1995. At the time the Village prepared comparisons of the rate increases
which would be required for either scenario. The well expansion scenario resulted in
increases ranging from 52 -84 %, with actual water rates in the range of $3.80- 4.60/1,000
gallons. The comparison is identified in exhibit B. Keep in mind that these ranges reflected
the increases which would be required after all new improvements (2 reservoirs /3 wells)
were completed. The rate increase which is being proposed only represents the first phase
of the improvements.
III. STAGGERED RATE INCREASE
When the Board last discussed the issue of water rate increases in November 1995, there was
direction given to the staff to work out a staggered rate increase to pay for the first phase
of improvements. To accommodate this request we structured the bond issue to allow for
two payments in 1997, as opposed to having one or more in 1996. This will allow us to
implement a staggered increase without adversely affecting our overall water & sewer fund
balance.
It is recommended that we implement the first increase for all water sold on or after January
1, 1997, with the second increase effective for all water sold on or after January 1, 1998.
Both increases can be adopted in the same ordinance to avoid having to revisit the issue
later.
IV. RECOMMENDED RATE INCREASE
As previously stated, the average debt service requirement of $215,500 would require a rate
increase of 24.4 %. However, in view of our growing revenues and healthy cash balance in
the capital improvement fund, I feel we can get by with a 20% increase, implemented in two
10% increments according to the timing stated in section III.
Such an increase would result in water rates as shown in exhibit C.
Although this increase is based solely on our need to retire debt service, you will be
interested to note that the last water rate increase adopted by the Village was in December,
1987,
V. CAPITAL IMPROVEMENT CASH FLOW
All water & sewer projects are funded in the Water & Sewer Capital Improvement Fund.
In an effort to illustrate the overall inflow /outflow of this fund I have put together a cash
flow analysis which will take us to the end of FY1997 -98. A summary is identified in exhibit
D.
As you can see, upon completion of the construction of well #5 and engineering of well #6,
we will still have funds available to offset the need for additional debt for well #6. You will
recall that approximately $700,000 of the current well project was to be financed with non-
debt sources.
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WATER RATE_COMPONENT
CURRENT WATER RATE(1)
IMMEDIATE & INTERMEDIATE NEEDS(2)
EXPANSION OF WELLS /SOFTENERS /RESERVOIRS(2)(7)
WELL /SOFTENER ELIMINATION CREDIT(5)
CHGO /BEDFORD PARK /CITIZENS RATE(4)
2 —DAY STORAGE /RESERVOIR COST(6)(7)
, ANTICIPATED TOTAL WATER RATE
EFFECT OF EACH WATER OPTION UPON WATER RATES
WELL /SOFTENER
EXPANSION
.(RATE /1,000 GAL)
LIKELY RANGE OF COST ( +/— 10 %)
PERCENTAGE INCREASE FROM CURRENT COST
$2.50
0.44
1.31
0.00
0.00
0.00
$4.25
$3.80 — $4.60
52% - 84%
EXHIBIT B
PRIVATE LAKE
MICHIGAN WATER PIPELINE
(RATE /1,000 GAL).
$2.50
0.44
0:00
— 0.32
2.75
0.18
$5.55
$4.90 — $6.10
96% — 144%
(1) THIS AMOUNT COVERS EXISTING SALARIES, EQUIPMENT, DEBT SERVICE, DISTRIBUTION SYSTEM MAINTENANCE, AND
INTERFUND TRANSFERS, AND ALL EXPENSES WHICH WOULD EXIST REGARDLESS OF WATER SOURCE. A CREDIT IS IDENTIFIED
AS A SEPARATE LINE ITEM REFLECTING MAINTENANCE COST SAVINGS RELATED TO SWITCHING TO NON —WELL SOURCE.
(2) SOURCE: STRAND ASSOCIATES
(3) SOURCE: BAXTER & WOODMAN; FLATLAND THOMAS & COMPANY; VILLAGE STAFF.
(4) SOURCE: CITIZENS UTILITIES. THREE YEAR RATE, EXCLUSIVE OF CHICAGO ADJUSTMENTS.
(5) SOURCE: STAFF ESTIMATES BASED UPON FY1994 -95 BUDGET.
(6) SOURCE: STAFF ESTIMATES
(7) COST ASSUMING VILLAGE USES EXISTING CAPITAL FUNDS TO PARTIALLY OFFSET DEBT.
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1
WATER USER CLASS
Single— Family Residential
Single— Business
Multi— Business
Multi — Family Unit
Residence— Business Mix
Water Rate /1,000 Gallons
in excess of 4,000 Gallons
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EXHIBIT C
COMPARISON OF EXISTING AND PROPOSED WATER RATES
VILLAGE OF LEMONT
AUGUST 30, 1996
MONTHLY
MINIMUM BILL
EXISTING
$20.00
$20.00
$15.00
$15.00
$15.00
PROPOSED RATE INCREASES
MONTHLY
MINIMUM BILL
1/1/97
1
$22.00
$22.00
$16.50
$16.50
$16.50
$2.50 $2.75
L
MONTHLY
MINIMUM BILL
1/1/98
$24.20
$24.20
$18.15
$18.15
$18.15
$3.03
EXHIBIT D
WATER & SEWER CAPITAL IMP. FUND CASH FLOW PROJECTIONS (8/30/96)
FY1995 -96 THROUGH FY1997 -98
Revenues Expenses
FY 1995 -96
Beginning Balance (7/1/95) $1,624,083
G &H Payment 575,000
Interest 100,000
Interfunds 191,439
Developer Contributions 75,000
Bond Issue 2,500,000
Walker Sanitary Sewer $500,000
Martinez 20,000
Grade School Obligs 45,000
Well #5 Engineering 360,000
Well #5 Construction 3,200,000
Fricker Property 90,000
FY 1996-97
G &H Payment 575,000
Interest 65,000
Interfunds 600,000
Developer Contributions 10,000
Hillview Looping 53,000
Water & Sewer Projects 370,000
Hillview Ditch 15,000
Aero Water Assistance 500,000
FY1997— 98
G &H Payment 400,000
Interest 75,000
Interfunds 100,000
Developer Contributions 10,000
Water & Sewer Projects 290,000
Well #3 Rehabilitation 200,000
Well #6 Engineering 400,000
Total $6,900,522 $6,043,000 $857,522
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