Collinsville to proceed with water rate increase

News-DemocratDecember 9, 2013 

— Few people protested at a public hearing in which the council reviewed its plan to increase water rates in Collinsville.

Water director Dennis Kress clarified that while the water rate is going up 38 percent, the average resident will not see a 38-percent increase in his or her bill. The water rate is increasing from $3.33 per 1,000 gallons of use to $4.60, but the bill also includes sewer and trash charges.

Kress said the average Collinsville water bill is 4,100 gallons per month, so the average user will see an increase of about $5 per month or $10 per bi-monthly billing period.

A few residents had questions about the funding and billing practices for Collinsville's water rates after the council heard presentations from Kress and finance director Tamara Ammann.

The increase is needed to fund construction of a new water treatment plant, city officials said. The $16.6 million plant will replace Collinsville's existing plant, which was built in 1957 and requires at least $14 million in renovations if it were to continue operating.

The council decided in September to build a new plant, which Ammann said will hopefully be funded through a low-interest loan from the Illinois Environmental Protection Agency. That would put the loan interest below 2 percent, which would cost the city less than selling bonds, Ammann said.

The IEPA decision should be made within the next couple of months, Kress said, and Ammann said she was reasonably confident of approval.

Even with a water rate of $4.60 per 1,000 gallons, Kress said Collinsville's rate will remain among the lowest in the area. Water rates vary from $3.65 per 1,000 gallons for Edwardsville, which has an independent water system, to $7.47 for Fairview Heights, which buys its water from Illinois-American Water but handles its own distribution.

Belleville, Granite City, East St. Louis and other towns that are served directly by Illinois-American Water usually pay $5.13 per 1,000 gallons, plus a flat fee of $16.50 regardless of usage, according to Illinois-American spokesman Karen Cotton.

"It's really hard to compare a municipality to a private water company, because they have the ability to subsidize their water rates," Cotton said.

Kress said city officials had explored the option of buying water from a private source like Illinois-American, but found that it would increase costs more than building the new plant. Currently Collinsville's water supply comes from man-made wells throughout the city.

"The new plant will be much more economical, and we will save money in the long run... because of the decreased time," said Mayor John Miller.

Likewise, Kress said would take much longer to renovate the current plant, which does not have the redundancies necessary to conduct heavy maintenance without shutting down the plant, Kress said. The current plant also has no protection from seismic damages and a significant event could render the plant useless, he said.

"If we upgrade a 58-year-old building, at the end of the renovations we still have a 58-year-old building," Kress said.

While private utility companies like Illinois-American must receive clearance from the Illinois Commerce Commission to raise rates, municipalities that provide their own water service do not have to get clearance to raise rates, according to city manager Scott Williams.

The council also approved a property tax levy of $2.48 million, which will be the seventh year in a row without an increase, Ammann said. Collinsville's property tax rate in 2012 was 0.6746 for St. Clair County residents and 0.6676 for Madison County residents, and since the city's equalized assessed value has remained the same, Ammann expects the property tax will also remain stable.

The council approved a 2014 budget of $18.66 million in general fund expenditures and a total budget of $41.37 million for all funds, including tax increment financing districts, capital projects, bond funds and motor fuel taxes. That is a 19 percent increase over last year, due to capital projects such as two more phases of streetscape improvements and water main replacements. The following year's budget is projected to drop 11 percent.

Contact reporter Elizabeth Donald at edonald@bnd.com or 239-2507.

Contact reporter Elizabeth Donald at edonald@bnd.com or 239-2507.

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