Village, CWLP talking water, but agreement
not close
By Joe Pritchett
Clarion Editor
Officials from the Village of Chatham and the City of Springfield have been talking water in recent
weeks and months, but the two sides are still far apart from Chatham renewing its commitment to
CWLP and abandoning its plans for its own water plant east of Rochester.
In addition, Chatham officials were just informed of a 17 percent rate hike from CWLP, retroactive to
March 1, 2009. That increases the rate that Chatham pays Springfield from $2.20 per 100 cubic feet
of water to $2.57 per 100 cubic feet (or $3.44 per 1,000 gallons).
And that figure trumps what Springfield officials had estimated earlier - 14.4 percent increase and
$3.36 per 1,000 gallons.
Chatham officials had anticipated the increase and passed a six percent rate hike to local
customers in May. The newest raises from Springfield will not affect Chatham customers, at least not
yet. Village officials told the Clarion that water rates would be re-evaluated in the next budget cycle in
the spring of 2010.
"We think we can hold our rates until next year's budget and take a look at it at that time," Mayor
Tom Gray stated.
Springfield officials have provided Chatham with projected water rate increases through 2014,
should the Village remain with CWLP under the current contract, which expires in 2012. By fiscal year
2014, projected water rates for Chatham skyrocket to $5.00 per 1,000 gallons.
Those projections use a 2.3 percent increase in water usage per year for Chatham and do not
include any other variables, such as construction costs or other increases that could be passed on.
•Recently, Chatham officials received a letter from Springfield mayor Tim Davlin, outlining two
proposed options for the City and Village to agree on a new water contract.
With Chatham already sinking some $2.5 million into its own water plant, a deal with CWLP would
have to be a good one, and help the Village recoup those costs over the coming years.
Besides the basic water rate, there is the issue of a boundary line at play. Currently, Chatham
cannot sell water north of Mansion Road, a key potential growth area northwest of the Village.
If Chatham builds its own water plant and sells its own water to customers, there would be no
such boundary line restrictions.
The offers from Springfield included one with the current boundary line restriction in place, and one
without.
Offer A gives Chatham the outside City equivalent retail rate, and projects to a price of $4.64 per
1,000 gallons by 2012. There would be no boundary line restriction with that offer.
Offer B, which gives Chatham the inside City equivalent retail rate, projects to $3.57 per 1,000
gallons by 2012. The boundary restriction, however, would be in place.
Gray pointed out that the offers from Springfield represented "talking points," and no contract offer
has been extended. Any agreement would have to be approved by the governing boards of each
municipality.
Now, the key proponent in the talks is this question: At what rate will the Chatham-New Berlin
(South Sangamon - name change not yet official) Water Commission be able to sell water to
Chatham?
As engineering and design phases wind down for the new Chatham plant, those details are
getting closer to becoming reality. At this point, only projections can be made, and they are constantly
being updated.
According to Village Manager Del McCord, who also serves as Chair of the Water Commission, the
latest projections show a water rate of $3.75 to $4.00 per 1,000 gallons when the new plant comes
on-line.
And McCord added that the $4.00 figure is on the "high" end, with $3.75 more realistic.
A number of variables could drive that cost down, including adding more water customers and
communities.
"All of our numbers are based on Chatham only and are very conservative," McCord emphasized.
"Our rates would have a chance to go down, and I don't think you can say that if we stay with
Springfield."
McCord said the Water Commission is working towards "providing a firm number to both villages
(Chatham and New Berlin). When we get to the point where we can say what the Commission will
charge per 1,000 gallons, then the villages will have to decide whether to build the plant or stay with
CWLP."
"Springfield is not giving us the numbers we want to hear," Gray stated. "Every year at this time we
are looking at increases. Now, with the rates Springfield is quoting, I don't see us having any other
choice. I think people are finally starting to see why we are doing this and moving forward on our own."
Other factors are also in play, including the fact that Chatham has been using less water in recent
years. That could increase Chatham's rates further in the coming years. Also, there has been talk
that the Springfield City Council may have to pass a tax increase down the road to cover lost revenue
from Chatham, depending on what new contract, if any, is signed, thereby "subsidizing" Chatham
water, Gray said. The odds of something like that happening don't seem high.
In addition, the land north of Mansion Road is included in both the Chatham Fire District and
Chatham Area Public Library District, both Gray and McCord pointed out. If that land is allowed to go
to the City of Springfield in the future, those bodies could see a loss of their tax base and revenue,
thereby putting a further strain on local taxpayers to make up for that lost revenue.
•With the dialogue between officials from Chatham and Springfield continuing, McCord said the
Village has asked CWLP to provide the actual production cost of a gallon water. McCord said
Chatham should pay that number, plus a profit margin - a figure that could be negotiated.
Chatham officials have been working for some time to have that number provided to them, but as of
yet have not received any firm figures.
McCord added that the Village has invited representatives of CWLP to come to a Chatham
committee meeting to meet with village officials and engineers in order to go over the options and
proposals face to face.
not close
By Joe Pritchett
Clarion Editor
Officials from the Village of Chatham and the City of Springfield have been talking water in recent
weeks and months, but the two sides are still far apart from Chatham renewing its commitment to
CWLP and abandoning its plans for its own water plant east of Rochester.
In addition, Chatham officials were just informed of a 17 percent rate hike from CWLP, retroactive to
March 1, 2009. That increases the rate that Chatham pays Springfield from $2.20 per 100 cubic feet
of water to $2.57 per 100 cubic feet (or $3.44 per 1,000 gallons).
And that figure trumps what Springfield officials had estimated earlier - 14.4 percent increase and
$3.36 per 1,000 gallons.
Chatham officials had anticipated the increase and passed a six percent rate hike to local
customers in May. The newest raises from Springfield will not affect Chatham customers, at least not
yet. Village officials told the Clarion that water rates would be re-evaluated in the next budget cycle in
the spring of 2010.
"We think we can hold our rates until next year's budget and take a look at it at that time," Mayor
Tom Gray stated.
Springfield officials have provided Chatham with projected water rate increases through 2014,
should the Village remain with CWLP under the current contract, which expires in 2012. By fiscal year
2014, projected water rates for Chatham skyrocket to $5.00 per 1,000 gallons.
Those projections use a 2.3 percent increase in water usage per year for Chatham and do not
include any other variables, such as construction costs or other increases that could be passed on.
•Recently, Chatham officials received a letter from Springfield mayor Tim Davlin, outlining two
proposed options for the City and Village to agree on a new water contract.
With Chatham already sinking some $2.5 million into its own water plant, a deal with CWLP would
have to be a good one, and help the Village recoup those costs over the coming years.
Besides the basic water rate, there is the issue of a boundary line at play. Currently, Chatham
cannot sell water north of Mansion Road, a key potential growth area northwest of the Village.
If Chatham builds its own water plant and sells its own water to customers, there would be no
such boundary line restrictions.
The offers from Springfield included one with the current boundary line restriction in place, and one
without.
Offer A gives Chatham the outside City equivalent retail rate, and projects to a price of $4.64 per
1,000 gallons by 2012. There would be no boundary line restriction with that offer.
Offer B, which gives Chatham the inside City equivalent retail rate, projects to $3.57 per 1,000
gallons by 2012. The boundary restriction, however, would be in place.
Gray pointed out that the offers from Springfield represented "talking points," and no contract offer
has been extended. Any agreement would have to be approved by the governing boards of each
municipality.
Now, the key proponent in the talks is this question: At what rate will the Chatham-New Berlin
(South Sangamon - name change not yet official) Water Commission be able to sell water to
Chatham?
As engineering and design phases wind down for the new Chatham plant, those details are
getting closer to becoming reality. At this point, only projections can be made, and they are constantly
being updated.
According to Village Manager Del McCord, who also serves as Chair of the Water Commission, the
latest projections show a water rate of $3.75 to $4.00 per 1,000 gallons when the new plant comes
on-line.
And McCord added that the $4.00 figure is on the "high" end, with $3.75 more realistic.
A number of variables could drive that cost down, including adding more water customers and
communities.
"All of our numbers are based on Chatham only and are very conservative," McCord emphasized.
"Our rates would have a chance to go down, and I don't think you can say that if we stay with
Springfield."
McCord said the Water Commission is working towards "providing a firm number to both villages
(Chatham and New Berlin). When we get to the point where we can say what the Commission will
charge per 1,000 gallons, then the villages will have to decide whether to build the plant or stay with
CWLP."
"Springfield is not giving us the numbers we want to hear," Gray stated. "Every year at this time we
are looking at increases. Now, with the rates Springfield is quoting, I don't see us having any other
choice. I think people are finally starting to see why we are doing this and moving forward on our own."
Other factors are also in play, including the fact that Chatham has been using less water in recent
years. That could increase Chatham's rates further in the coming years. Also, there has been talk
that the Springfield City Council may have to pass a tax increase down the road to cover lost revenue
from Chatham, depending on what new contract, if any, is signed, thereby "subsidizing" Chatham
water, Gray said. The odds of something like that happening don't seem high.
In addition, the land north of Mansion Road is included in both the Chatham Fire District and
Chatham Area Public Library District, both Gray and McCord pointed out. If that land is allowed to go
to the City of Springfield in the future, those bodies could see a loss of their tax base and revenue,
thereby putting a further strain on local taxpayers to make up for that lost revenue.
•With the dialogue between officials from Chatham and Springfield continuing, McCord said the
Village has asked CWLP to provide the actual production cost of a gallon water. McCord said
Chatham should pay that number, plus a profit margin - a figure that could be negotiated.
Chatham officials have been working for some time to have that number provided to them, but as of
yet have not received any firm figures.
McCord added that the Village has invited representatives of CWLP to come to a Chatham
committee meeting to meet with village officials and engineers in order to go over the options and
proposals face to face.
Chatham Clarion
 | |  | |  | |  |
Issue Date: Aug. 13, 2009