During my 18 years as mayor, the O’Fallon City Council and I have strived to provide the highest quality services at the best taxpayer value. We have continually invested in our community’s future to make O’Fallon a destination of choice for residents and visitors. O’Fallon’s consideration of leasing the water and wastewater systems is another example of our effort to provide the best services at the best value.
O’Fallon began to explore the possibility of a lease as a way to fund projects listed in the Strategic Plan, and to assess how efficiently and effectively the city operates and delivers water and wastewater services. As part of that effort, the city looked to determine the economic value of the utilities, and if there were advantages to transferring the operations to a private company. Our water and wastewater rates have been rising faster than our neighbors who are serviced by private companies. Currently, funds from O’Fallon’s water and wastewater utilities cannot be used to fund most city expenses.
In the next 15 years, O’Fallon is expected to grow to more than 40,000 residents. Our city’s Strategic Plan outlines key infrastructure needs as well as major initiatives to maintain the high-quality of life for O’Fallon’s residents. The projects that the city is exploring funding options for include:
A paving and reconstruction program for streets and storm water systems, including improvements for the presidential streets and the aging areas of town;
Improvements around Interstate 64 Exit 16, increasing Green Mount Road to four lanes, new turning lanes for Central Park Plaza and Regency Drive, and the future extension of Ashland Avenue;
Advancement of the Family Sports Park master plan;
Parking and improvements in downtown O’Fallon;
Extending utilities to I-64 Exit 21 and Rieder Road, which will serve as an additional entry way to Scott Air Force Base, and open up nearly 1,500 acres for development; and
Establish a legacy fund to help protect O’Fallon’s long-term financial future.
All of these projects will increase the quality of life, help protect property values, and continue to make O'Fallon the premier community in the metro-east region.
O’Fallon’s consultants determined that a lease could generate a minimum of $50 million for the City to fund future-focused projects, while maintaining local ownership of the system.
Any potential lease of the city’s water and wastewater systems would have to achieve at least the following benefits:
The costs to operate the water and wastewater systems will be reduced;
The operating partner will hire current employees, subject to existing hiring policies, at comparable pay and benefit levels;
The operating partner will be responsible for funding most capital improvements, not the city; and
Service quality and environmental standards must equal or exceed current practices.
In addition to these benefits, the city’s existing rate ordinance will remain in place and the city will retain authority over rates and rate setting during the term of any agreement. There will be no additional facility charges or fees.
O’Fallon water customers should not notice any difference in water quality or service. The city already purchases its water wholesale from private Illinois American Water Co. and that will remain if the city leases. The following cities also operate with a private utility company: Alton, Belleville, East St. Louis, Edwardsville, Fairview Heights, Granite City, O’Fallon, Shiloh, Swansea and Waterloo.
The leasing company won’t let the systems deteriorate during the lease. They will have to agree to operating standards set by the city that will specify how the systems will be upgraded and maintained. The city will have the ability to apply liquidated damages to the company if the standards are not followed. The city will have enforceable guarantees in place equal or better than what it has now.
It is important to emphasize that the City Council has not made a decision yet. The council wants to do what is best for the long-term future of O’Fallon, and leasing the water and wastewater systems has the potential to be a tool toward realizing that future. All that we ask is to have the opportunity to complete the evaluation process to determine whether leasing the utilities is a viable funding option.
On April 7, I encourage everyone to vote on this important issue.