Joliet takes another look at water rate projections

Joliet residents may not see much change in projections that water rates will triple by 2030 even with the cost savings that come from the creation of a regional commission for Lake Michigan water.

The creation of a commission that includes Joliet and five neighboring communities to share costs has brought down what Joliet likely will pay for construction of a system to deliver Lake Michigan water to faucets by 2030.

However, Joliet has had to accelerate a water main replacement program at the same time, and that could offset cost savings gained from the commission.

The city team working on the water project has estimated that monthly water bills would rise to $88 by 2030 in part to pay for the Lake Michigan project. Joliet water rates still are expected remain in line with others in the area because of an upward climb in water rates everywhere.

The water rate projection for 2030 bills was done in 2020.

“We have not done an update on the 2030 bills,” Swisher said. “There’s going to be a lot of information going into that analysis, including the water main replacement program.”

Swisher said the water rate projections could remain close to the same, and the city is seeing savings from the formation of the water commission.

The cost of the Lake Michigan project was estimated in 2020 – the same time the projection was made on water rates – at between $592 million and $810 million. The low end was based on a Joliet-only system, the high end was based on an expanded system to serve multiple communities.

Joliet now estimates its cost, which includes the city’s share for the pipeline to Chicago along with improvements in the current Joliet water system to accommodate Lake Michigan water, at between $483 million and $513 million in 2020 dollars.

But the update on water rates will have to factor in $340 million for a water main replacement program that now has to be done by 2030.

“We had originally prepared a 20-year replacement schedule,” Swisher said, noting the costs would have been spread over a longer period.

But the Illinois Department of Natural Resources, the agency that issued the permit granting Joliet access to Lake Michigan, wanted a faster schedule to meet a standard for water loss. Joliet now loses about a third of the water that it pumps out of city wells, most of which is believed to leak out of aging water mains. The standard for cities that use Lake Michigan water is 10% water loss.

“They [IDNR] said the 10% would apply to when we would get the water, so we had to accelerate the schedule,” Swisher said.

That means costs that had been planned after 2030 now have to be taken into account before then, putting a new wrinkle into overall project estimates.

“Where it gets complicated is how the Joliet water main replacement goes into it,” Theresa O’Grady, a consulting engineer working on the project, said when discussing latest estimates of Joliet costs.

Original estimates of the project costs between $592 and $810 million did not include the cost of water main replacement when those costs were going to be stretched over 20 years, O’Grady said.

“It wasn’t a large impact, which is why we didn’t include those numbers,” she said.

Those costs were factored into the projected water rates, Swisher said. And, federal loans for the project could allow the city to defer upfront costs to future years, which could leave water rate projections close to where they are now, she said.

A new analysis of future water rates may not be ready until late this year. The City Council next week is expected to consider a contract to hire the firm Burns & McDonnell to conduct a water rate analysis.