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The City of Evanston continues to move forward with plans to sell Lake Michigan water to nearby communities, according to a presentation delivered to City Council at its Feb. 11 meeting. This presentation, made by the City’s Director of Utilities, Dave Stoneback, followed up on a presentation made in March 2012.

Last March, Mr. Stoneback asked for and received Council approval to partner with six potential customers in commissioning a Transmission Main Study. The study, completed in December for a cost of $147,000 – $21,000 for each of the seven partners – analyzed possible routes for water pipes to carry water from Evanston’s pumping station west. Four possible routes were identified, with the possible participation of one of the partners, the Northwest Suburban Municipal Joint Action Water Agency (known as NSMJAWA or “nimsyjawa”), determining to a great extent which route must be selected.

The City currently sells water to Skokie and another conglomerate, the Northwest Water Commission (Arlington Heights, Buffalo Grove, Palatine and Wheeling). The other cities and villages interested in hooking up the hose are Des Plaines, Lincolnwood, Niles and Park Ridge.

Lincolnwood, the closest geographically, is interested in signing on separately from the others, since constructing a single pipe to Lincolnwood is more cost-effective than paying a percentage of a larger pipe serving all customers, said Mr. Stoneback. The Evanston-Lincolnwood distance would be measured from the southwest standpipe on Lee Street, not from the water utility, thus shortening the water-pipe length and keeping construction costs down.

The cost of any of the four routes suggested by the study is staggering, ranging from $235 million to $487 million, according to Mr. Stoneback’s presentation. But “it is assumed that the cost for constructing the transmission main will be borne by the partners that elect to participate,” according to the presentation and Mr. Stoneback.

The vast gulf between cost estimates again centers upon NSMJAWA. If NSMJAWA joins, a larger tunnel will be necessary, and NSMJAWA will bear the bulk of the cost of it. If NSMJAWA is not involved, a less expensive “open cut” pipe will suffice, said Mr. Stoneback.

A rise in customers might require an expansion of the City’s water treatment plant.  The current plant can pump 108 million gallons per day and even without NSMJAWA the plant would need to have a capacity of at least 132 million gallons per day – 214 million with NSMJAWA.  Mr. Stoneback says the City is “currently investigating costs to expand [the] treatment plant.”

The cost of expanding the treatment plant would be Evanston’s responsibility, but Mr. Stoneback said that the City would not undertake the expansion until it had firm commitments from new customers to purchase water from Evanston. He says he anticipates that the revenues from water sales would easily cover the debt service on bonds sold to pay for expansion.

Rates the City would charge have not been established, but the report indicates that the American Water Works Association principles would be applied to establish rates. According to figures provided by Mr. Stoneback, the cost of debt service for the construction of any of the four routes would be generally in the range of $1 to $2 per 1,000 gallons. The City of Chicago will charge $3.82 per 1,000 gallons in 2015, leaving plenty of room between the two figures, he said. Ultimately, the rates charged would be established by City Council.

Without a customer list, a dollar figure for water-plant upgrades, and an established water rate, it is impossible to tell how much revenue the City can anticipate from increasing water sales. What is known is that the City does not expect the sale of water to result in any increase in water rates for Evanston residents.

Water Rates

Evanston residents currently pay $1.67 per 1,000 gallons, but that figure is a bit deceptive. In Evanston, a water account generally requires a sewer account as well, and residents pay $5.27 per 1,000 gallons for sewer service. By way of contrast, the City of Chicago charges $2.89 per 1,000 gallons for water but only $2.67 per 1,000 gallons for sewer service. An Evanston resident’s total water/sewer bill, therefore, is $6.94/1,000 gallons, compared to a Chicago resident’s $5.55. Chicago, however, has already established rate increases that will bring the monthly total to $7.64 ($3.82 each for water and sewer) by 2015. Evanston has not voted on a similar hike, though City staff has proposed water rate increases.