Future Oswego water rate hikes may be larger if voters reject referendum

Oswego water tower

Future Oswego water rate increases may be larger if voters reject a village referendum seeking to create a real estate transfer tax.

The village is seeking passage of the referendum June 28 to secure additional revenues to cover the cost of obtaining Lake Michigan water through the DuPage Water Commission.

Early voting for the June 28 election will begin May 19.

The village has pumped its water from the deep well sandstone aquifer which extends under most of northeast Kendall County. The Illinois State Water Survey, however, has determined that the water level in the aquifer is dropping and it may not be able to meet local demand by 2050.

Following several years of study by the village and its consultants for a new water source, the village board voted last December to adopt a resolution designating Lake Michigan as the preferred new water source for the village and the DuPage Water Commission as the preferred provider of the lake water.

The village’s cost of connecting to the DuPage Water Commission’s system has been estimated at upwards of $75 million, according to the village.

To help cover a that cost, the village board voted early last month to place the real estate transfer tax referendum on the June ballot.

The referendum question reads: “Shall the Village of Oswego impose a real estate transfer tax at a rate of $3 per $1,000 of value to be paid by the buyer of the real estate transferred, with the revenue of the proposed transfer tax to be used for construction and maintenance of the Village of Oswego water system, including connection to Lake Michigan water, and lessening the increase in future water rates?”

In placing the referendum on the ballot, the board adopted an ordinance that stipulated the tax would only be applied to first-time buyers of homes and other real estate in the village.

“Current Oswego property owners who purchase a new home in Oswego would be exempt if they have lived in their home for a year or more,” according to a question and answer statement on the referendum posted on the village’s website.

The statement continues, “The proposed tax provides a way for future residents to offset the impact of water rate increases when the village connects to Lake Michigan water. We estimate that it will generate more than $500,000 per year. Without the tax, that amount would likely have to be generated through increased water rates.”

If voters approve the referendum and the results are certified, the village could begin collecting the tax on property sales as soon as Aug. 1, according to the statement.