Story posted Wednesday, January 27, 2010
City Debates Water Rates, Reserves
By CRAIG ADAMS Journal & Topics Reporter
How much money should be in a reserve fund was a question bantered about as the Park Ridge City Council discussed its budget problems and a potential increase to water and sewer rates.
On May 18, 2009, the council voted for only a 5% increase in the water rates, creating a shortfall in the water fund of $404,000. The increase partially offset the 15% raise in price put through to the city by Chicago. That price went up another 14% on Jan. 1, 2010.
Last May, Mayor Dave Schmidt asked for the entire increase to be passed to water customers, but the council declined, agreeing to take the extra money from reserves instead. The water fund started the year with a $3 million surplus representing only 20% of the assumed expenses for the year. The city has a policy to keep cash reserves of 33 to 50% of the total budget, but no policy on individual enterprise funds.
"Has any council in the past voted on how much of a surplus we should accumulate in the water fund of taxpayer money?" asked Ald. Frank Wsol (7th), on Monday, Jan. 25, knowing the answer was no. "My understanding is as an enterprise fund, the water fund is meant to pay water expenses. We have accumulated an excessive surplus," he added.
However, Wsol later indicated that reserves were important. He talked of emergencies such as the 100-year floods or 12-foot snowstorms that have hit the city. "We need the flexibility to take care of those events even if you haven't budgeted for those events," he said. "That's why you have reserves."
Not knowing how much money should be in reserve led to the current situation that Schmidt said means taxpayers are subsidizing businesses' water bills. "Every day, the property tax payers are helping to pay the water bills for Lutheran General, the schools... other large businesses like Dominick's and Jewel," he said.
Ald. Don Bach (3rd) argued against raising the water rates for all users, questioning if the city couldn't only increase the price for the high-volume users. "I would not like to see the average 65-year-old homeowner have to pay a couple more cents a gallon," he said.
Resident Judy Barclay asked why the city didn't pass along the latest increase. "If Chicago's increasing us 15%, then we should be paying 15%," she said.
Barclay also suggested a different gradient level. She did not think it fair that a resident using only 1,000 gallons a month pays the same as one who uses the full 5,000 gallon allotment. "Why don't we pay as we use?" she asked.
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