Caseyville Township trustees have warned citizens they’ll be forced to increase customers’ sewer service rates if two bills in the Illinois General Assembly that regulate tap-on fees are made law, but the bills’ sponsors — and local developer Darwin Miles — say Caseyville is a “rogue township” that’s been price-gouging for years.
Supporters of the new regulations say the township is using scare tactics to preserve a “cash cow.”
For example, Caseyville Township charges a tap-on fee of $2,000 per fixture to commercial businesses and non-profits, such as churches. That means a developer building a 128-room hotel in the Shiloh area served by the township would pay a tap-on fee of $260,000.
The House bill, sponsored by state Rep. Dwight Kay, R-Glen Carbon, requires townships with their own sewer and water plants to limit the tap-on fees charged to people building new homes or businesses to 1/6 of the estimated yearly cost of sewer and water service.
Senate Bill 1815, sponsored by state Sen. Kyle McCarter, R-Lebanon, sets standard sewer and water tap-on fee schedules for new homes, apartment buildings and businesses based on the size of water meter they’ll use. Because state law contains no standards, townships currently can come up with their own rates and fees. For years, new businesses, non-profits such as churches, and residents building homes have complained that Caseyville Township’s tap-on fees far exceed neighboring utilities.
According to Caseyville Township Trustee Rick Donovan, the tap-on fees now in place help to repay a $23 million Illinois Environmental Protection Agency loan it took out to modernize one of its sewer plants. That debt service costs the township $1.67 million each year, he said.
Currently, anyone building a new home in the township must pay $2,000 to hook up to the sewer system, compared with $3,000 in nearby O’Fallon. But new apartment buildings are charged $2,000 for each plumbing fixture, compared with a flat $3,000 per unit in O’Fallon.
Because all sewer customers in the township are charged a flat rate of $28 each month, capping the tap-on fee to a sixth of the $336 yearly charge to customers would mean slashing the tap-on charge to $56.
“The whole board is on the same page. We have no desire whatsoever to raise the sewer rates,” Donovan said. “They’ve been at $28 a month for years. We haven’t had any reason to raise them and we hope we never do. But if the bills pass, we’ll have no choice.”
Donovan said the bills were the brainchild Miles, the local developer. Donovan said the proposed changes in the bills would mean an increase in Miles’ profits on the backs of the township’s customers.
“These bills were clearly designed for the developers. It’s pretty evident that sewer users are going to be paying more per month so the developers can increase profits. The end result is not going to be favorable,” Donovan said. “I don’t see any way in the future we could make up that lost revenue. Pretty hard to maintain your state-of-the-art sewer system when they take your revenue away.”
This is where the organization that lobbies on behalf of townships, Township Officials of Illinois, would come in, Donovan said. But he said he and other board members were disappointed that TOI hasn’t done more to help.
Executive Director Bryan Smith said the township organization has “been very active,” but with so many players in the game, he said there were “a lot of players other than townships in the bill and it’s kind of hard in my opinion to find a one-size-fits-all regulation for something like this.”
“We do officially oppose the bills but haven’t really seen any alternatives yet that we could agree to,” Smith said.
Miles freely admits the bills were his idea, but he said the proposed changes to the law are about parity, not profits. The goal, he said, is to ensure Illinois communities hoping to attract new development are competitive in the St. Louis region while also making sure Caseyville Township stops gaming a system that has few rules.
One example Miles provided is the Heartland Women’s Healthcare location on Fortune Boulevard in Shiloh. The 8,700-square-foot building he helped develop is identical to similar locations in Mount Vernon and Marion. While the doctor who built the locations in Mount Vernon and Marion paid $300 and $700 respectively in tap-on fees, he was charged $62,000 in Caseyville Township, according to a township invoice.
A 128-room hotel, for instance, would face tap-on fees of $3,000 and $13,000 in Collinsville and Mount Vernon, respectively, compared with more than a quarter of a million dollars to Caseyville Township.
“This is over the top. This is a rogue township. It makes all the other townships look bad,” Miles said.
Two other local townships that operate their own sewer systems have tap-on fees considerably lower than Caseyville’s. St. Clair Township charges $1,000 to connect new homes to its system. It charges 75 cents per square foot for commercial buildings but has a $5,000 limit. So the Heartland Women’s Healthcare project would have cost $5,000 in St. Clair Township.
Stookey Township charges $3,200 for new homes and duplexes; fees for larger residential buildings and businesses were not immediately available.
Caseyville Township’s tap-on fees outpace even those in Chicago’s home of Cook County and its wealthy neighbor DuPage County. Tap-on fees there are $750 and $1,500, respectively.
“If you were buying a car or some commodity on this basis, you would probably yell price-fixing or gouging,” said Kay. “Word has spread that this is not a business-friendly area. It’s too bad.”
Kay said Caseyville Township officials have spread “misinformation” about the proposed legislation, but that misinformation has nonetheless been effective. Even though his bill sailed unopposed through the House Cities and Villages Committee late last month, voters in the township flooded his office with calls demanding he kill the bill, so he has tabled the bill for now.
“It’s obvious that (Caseyville Township) will go to great lengths to misrepresent or distort what are not the facts,” he said.
What stings, Kay said, is that his bill is nearly identical to one that secured unanimous passage in both the House and Senate last year but died when then-Gov. Pat Quinn used his amendatory veto to remove municipalities from the bill’s language. House Speaker Michael Madigan, D-Chicago, never called the amended bill for a vote.
McCarter’s bill is still alive. “Everyone knows that this abuse is wrong. (Caseyville Township) is taking advantage of no rules,” McCarter said of the tap-on fees.
It’s not like Caseyville Township’s coffers are running dry. According to audits the township is required to provide to the state Comptroller’s Office, the accounts used to collect tap-on fees and pay off debt continue to grow.
For example, the 2012 audit showed the township had $2.8 million in its debt service account and $6.3 million in its tap-on account. In the 2014 audit, the township reported $3.3 million in the debt service account and $7.5 million in the tap-on account.
“The truth is, the taxpayers should be calling them and ringing their phone off the hook saying ‘give us our money back.’ If Caseyville Township was selling (electricity), the Illinois Commerce Commission would have been here in a heartbeat to stop what they’re doing,” McCarter said. “We just don’t have the oversight, regulation and transparency to deal with a rogue township like this.”
He said legislation that sets tap-on fees based on water meter size will ensure townships and municipalities that manage their own sewer and water systems don’t take advantage of rate payers.
‘It’s a ploy’
One of those rate payers, a Shiloh resident served by Caseyville Township’s sewer system who asked that his name not be used, said he didn’t buy the township’s argument the moment he got their letter in the mail.
“It’s a ploy. I thought as soon as I looked at the situation that they were just using (Kay’s and McCarter’s bills) as an excuse to raise rates,” he said. “Whether they need the money or not, it’s an excuse.”
“The way I feel about it is, the tap-in fee is too high. It needs to be adjusted,” he added. “I think that the rate increase that Caseyville Township is threatening is out of whack.”
Kay said residents are right to be skeptical about the messages they get from the township.
“People are not silly. They’re not as foolish and not as disconnected as the township would like to think they are,” Kay said. “This is a show-stopper for business and jobs. People are not going to be held hostage by this. No sir.”
McCarter agreed. “They (the township) have been caught,” he said.
“The whole board is on the same page. We have no desire whatsoever to raise the sewer rates. They’ve been at $28 a month for years. We haven’t had any reason to raise them and we hope we never do. But if the bills pass, we’ll have no choice.”
Rick Donovan, Caseyville Township trustee
“The truth is, taxpayers should be calling them and ringing their phone of the hook saying ‘give us our money back.’”
Kyle McCarter, State senator