Yorkville may increase water connection fees for new construction

YORKVILLE – Looking at a $127 million price tag for the Lake Michigan water project, Yorkville city officials have been turning to every financial option available.

They have increased water rates, approved a new restaurant and bar tax, are preparing to sell bonds and are applying for huge federal and state loans.

On top of that, the city is considering a significant increase to the connection fees it charges developers for new construction, Mayor John Purcell said. “We would be increasing it by several thousand dollars per unit over several years.”

Currently, the city charges $5,555 to connect a typical new single-family home to the municipal water system, Purcell said.

The fees are on a sliding scale depending on the size of the new construction. A new efficiency unit can be connected for as little as $1,587.

“We would raise them across the board,” Purcell said. The city needs to build revenue streams to fund the repayment of loans and bonds.

“We need to get bits and pieces here and there. It’s going to add up. I don’t think it’s out of line to increase a water hookup fee.”

The mayor suggested that the city might collect $1 million a year or more in new revenue, but tempered that expectation.

The new fees would be phased in over three to five years, Purcell said, noting that the city would have to honor agreements and fee schedules with developers for building projects that already have been approved. Moreover, the economy and the new home market would have an effect on the yearly revenue from the one-time fee.

Purcell regards an increase in the connection fees as yet another piece in a complex financial puzzle. For example the new 1% “places of eating” tax on prepared meals and drinks, which takes effect Jan. 1, 2024, is expected to produce about $700,00 in its first year.

That money will go to repay the $11 million bond sale, which is scheduled to take place within days. The bond sale will fund water system improvements that must be made in order to comply with requirements of the DuPage Water Commission and city of Chicago.

One of the improvements involves a major construction project that has been taking place this spring and summer to replace leaky water mains.

The city loses 14% of its treated water supply and must reduce that amount to less than 10% in order to get a state permit to access lake water.

Yorkville, Montgomery and Oswego have joined the DuPage water system and the three are funding a $4.2 million preliminary engineering study to determine the route and other details of the pipeline that would bring Lake Michigan water to the communities.

Meanwhile, Yorkville is applying for a $101 million loan from the federal Water Infrastructure Finance and Innovation Act program. The loan amount represents 80% of the cost for the gigantic engineering project, the maximum that the city could receive under WIFIA rules because its population is less than 25,000.

Oswego is well past that population threshold and may borrow only 49% of its costs. So is Montgomery, for purposes of the loan.

While the village population is about 21,000, the 8,500 residents of unincorporated Boulder Hill who are served by Montgomery’s water system are included in that count.

Yorkville also is considering an application for a low-interest loan from the Illinois Environmental Protection Agency.

Water ratepayers in Yorkville dodged a second increase this year because aldermen decided to impose the restaurant meal tax instead.

Last year, the city increased its base water rate for the first 350 cubic feet of water consumed from $17 to $24. A “volumetric” rate for every 100 cubic feet of water over the first 350 was increased from $4.30 to $4.80.

The typical residential household uses about 1,200 cubic feet of water per 60-day billing cycle, for a total cost of about $64.80. One cubic foot of water is about 7.5 gallons.

Next year, the city is planning another water rate increase, this one about 15% to 18% which is projected to produce an additional $700,000 a year in revenue and cost the typical Yorkville household another $5 to $10 per month.