McHenry officials raise water, sewer rates

The McHenry City Council on Monday approved increases to water and sewer usage rates, putting in place higher utility costs for homeowners that local officials initially suggested go into place last year but were delayed because of COVID-19.

The higher rates, which take effect Aug. 1, also will prevent a shortfall between revenues and operating expenses for both the city’s water and wastewater funds.

Water rates will be increased by 8% to $3.82 per 1,000 gallons for residential properties in city limits and to $4.09 for congregate care utility customers. For users of city utilities outside McHenry’s boundaries, the rates are $5.73 per 1,000 gallons for homes and $6.14 for other users.

Wastewater rates are going up 5% to $4.20 per 1,000 gallons for homes in the city limits and $4.06 for congregate care. The sewer rates for properties outside the city are $6.30 per 1,000 gallons for homes and $6.09 for other users.

“Once the budgets for the water, sewer and utility maintenance division of Public Works were developed, it was determined the current operational revenues for the water and sewer divisions were underfunding the needs of the divisions,” city staff wrote in a memo to the council.

Without the increase, the water and sewer funds would face a combined projected deficit of more than $233,900, according to city budget documents.

The council vote to approve the rate increases was unanimous.

Before fiscal 2015-16, McHenry adjusted its utility rates based on the Consumer Price Index rate of inflation, as opposed to reviewing the rates every year, as the city does now.

“Unfortunately, this CPI adjustment did not correlate to the actual cost of operations for McHenry’s water and wastewater divisions and did not account for the specific capital infrastructure needs of the municipality,” according to city budget documents from this year. “This resulted in a shortfall in water and sewer revenues and an inability to fund water and sewer capital projects of the existing systems.”

In 2017, the city raised residential sewer rates by 36 cents and lowered the water rate by 14 cents. The next year, utility rates were not increased, and in 2019, the water rate was brought up 20 cents to the current rate of $3.54 per 1,000 gallons, in order to meet water maintenance and operational needs, the city staff said.

“There were a couple years in the late 2000s when we had substantial rate increases to be able to add to the fund,” City Administrator Derik Morefield said in March. “If we don’t do something with the rates in the 2021-22 fiscal year, we’d be looking at higher increases in years after that.”

City staff earlier this year estimated $1 million from the water and sewer fund base fee revenues can be spent on water and sewer capital projects in McHenry’s current fiscal year, running into the spring next year.

Among those projects are a well line’s rehabilitation that could cost $330,000; a utility relocation design for pipelines along Route 31 that could cost $300,000; designing a realignment for sanitary infrastructure along the city’s riverwalk that could cost $100,000; and $50,000 in lining for the sanitary sewer.

Families use between 5,000 and 10,000 gallons each billing cycle on average in McHenry, Morefield said, meaning utility bills will rise to $19.10 from $17.70 for 5,000 gallons of water use and to $21 from $20 for the same amount of sewer usage.

“I understand and see the foresight in regards to looking at those rate increases coming up and the need for this division to potentially move forward with that,” First Ward Alderman Vic Santi said during budget negotiations in March.