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The City of Evanston and several nearby communities have executed a Memorandum of Understanding under which seven parties will contribute to an engineering study that will explore the feasibility of Evanston’s becoming the wholesale water provider for about 15 communities. Director of Utilities Dave Stonebeck said the result could be “very profitable” and result in the City’s receiving “a considerable amout of money.”

While the City has discussed the idea of increasing water sales for years, recent increases in water rates charged by the City of Chicago, supplier to most suburban communities right now, has brought a sense of urgency to the negotiations. Chicago will increase rates to $3.82 per 1,000 gallons in 2015 according to Mr. Stonebeck. In contrast, Evanston currently charges Skokie, one of two wholesale customers, less than $1.00 per 1,000 gallons. The other wholesale customer, the Northwest Water Commission, pays about 50 cents per 1,000 gallons but also contributes to capital projects and some staff salaries, according to a presentation made to City Council in 2009.

The communities in play are Niles, Lincolnwood, Des Plaines, Park Ridge, the Northwest Water Commission (which includes Arlington Heights, Buffalo Grove, Palatine and Wheeling), and the Northwest Suburban Municipal Joint Water Agency (known as “Nimsy JAWA,” it includes Elk Grove Village, Hanover Park, Hoffman Estates, Mount Prospect, Rolling Meadows, Schaumburg and Streamwood). Morton Grove has also been approached but has not agreed to participate as yet.

In response to a question from Alderman Melissa Wynne, 3rd Ward, Mr. Stonebeck said the City has no plans to add any additional communities. Nimsy JAWA may be considering expanding, though.

Evanston sent a Memorandum of Understanding to all communities in January, seeking their contribution to an engineering study that will “determine the size, potential routes, construction methods and preliminary construction costs for a transmission main to supply water to interested parties,” according to Mr. Stonebeck’s memo to Council. Each signatory, and there are seven including Evanston, has committed to up to $30,000 to fund the study.

Evanston will be the lead agency for the study. A request for proposal will issue in April, a firm selected in May, and Mr. Stonebeck said he expects the study to be completed by the end of 2012. If everyone agrees to buy water from Evanston, said City Manager Wally Bobkiewicz, “we will need not a pipe but a tunnel.”

If Evanston becomes the source of wholesale water, it will not increase the amount of water pulled form the lake, said Mr. Stonebeck. Each community has an “allocation” of water set by the Illinois Department of Natural Resources pursuant to a 1967 U.S. Supreme Court decision. Evanston would simply become the entity that pulls the allotted water from Lake Michigan. The City of Chicago does so now for most communities.

Evanston is not the only player in the game. Mr. Stonebeck said Des Plaines is talking to Wilmette and Glenview as well. Nevertheless, if the engineering study finds it feasible and a number of communities buy in, Evanston could see a considerable increase in revenue from wholesale water sales within the next few years.