Oswego looking at increasing water, sewer rates to help pay for Lake Michigan water project

Oswego water tower

Oswego residents could see their water and sewer rates increase in future years to help pay for the village’s share of bringing Lake Michigan water to Oswego.

A preliminary rate study analysis of the village’s water and sewer rates was presented to village trustees at their Aug. 22 Committee of the Whole meeting. The village has not increased its rates since May 1, 2022.

Commercial and industrial users would see their rates increase, as well. In addition, water connection fees for new development would increase.

Under one scenario being considered, Oswego residents using 10 kgals would see their annual estimated costs increase from $584.16 in fiscal 2024 to $1,092.12 in fiscal 2031. Under the same scenario, seniors using 6 kgals would see their annual estimated costs increase from $201.88 in fiscal 2024 to $465.56 in fiscal 2031. A kgal is 1,000 gallons of water.

Currently, the village charges $2,200 in water connection fees per unit for all unit types. The study looks at increasing water connection fees by $1,000 to $3,000 per unit for single-family houses and townhouses.

A real estate transfer tax is expected to generate about $450,000 of additional revenue for the village’s water and sewer fund each year.

Another rate study is planned in 2031 “to make those final adjustments,” Oswego Public Works Director Jennifer Hughes told village trustees.

Oswego’s goal to obtain Lake Michigan water through the DuPage Water Commission is on track for 2027, according to village officials. To share the cost of the project, the village is partnering with Montgomery and Yorkville.

The village’s share is estimated at about $73 million. The village entered into an escrow agreement with the DuPage Water Commission in July to begin design of the transmission main from the connection at the DWC system in Naperville to Oswego, Montgomery and Yorkville, Hughes said.

Baxter & Woodman Consulting Engineers prepared the water and sewer rate study. Carolyn Grieves, of Baxter & Woodman, said the study is only a draft.

“This is a draft at this point and by no means final,” she told village trustees. “It’s a draft to let you know the range of where we’re at with potential rates.”

Baxter and Woodman did an alternative water supply study for Oswego in 2021.

“In that study, we determined that getting Lake Michigan water was the next best step for the village to meet ongoing water needs for the community,” Grieves said. “In addition, getting Lake Michigan water through the DuPage Water Commission was the best fit again for the village.”

Alexis Shotton, also of Baxter & Woodman, said the goal is to “provide the rate increases that are necessary to provide financially sound, fair and equitable utility funding and reducing that impact as much as possible to the customers.”

“Our main goal is to minimize the rate increases and impacts on seniors and low-income residents, minimize that as much as possible,” she said.

As she noted, the village’s water and sewer fund is an enterprise fund.

“It essentially operates similar to a business,” she said. “There are no outside funding sources like property taxes or sales taxes. It’s entirely from the water and sewer rates.”

Trustees will be discussing the issue again and will be looking at the water and sewer rates of communities already on Lake Michigan water. They also will discuss the possibility of increasing rates now versus later.