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City officials, on Jan. 23, reported that they were putting finishing touches on a new deal to sell water to the Villages of Morton Grove and Niles. The 40-year deal would initially bring in about $750,000 annually, according to estimates.
The announcement was made at the Jan. 23 City Council meeting, where Mayor Elizabeth Tisdahl proclaimed Public Works Director Dave Stoneback to be her “hero.”
Mayor Tisdahl mentioned a previous sale to Des Plaines, worth about $500,000, and added, “Lincolnwood has called me twice and I have referred them to you, so I think there is at least one more sale in the offing.”
Mr. Stoneback offered more specific details of the sale earlier that evening at the Administration and Public Works Committee Meeting, where City Manager Wally Bobkiewicz described the time and effort involved in the sales.
“It’s been nearly seven years of working on this, of convincing communities that have had the same water source for nearly 100 to change their water source,” said Mr. Bobkiewicz, who said that the decision to pursue water sales was a “tentpole” that would “help the community to stand.”
The agreement, he added, would “not be subject to the whims of the economy. It’s not subject to a better offer coming along. This is a long-term agreement that serves this community – that serves the residents of this community – because of the dollars it generates.”
Mr. Stoneback said with the sale, the City would be getting a 9.5 percent return of rate on its investment in the water plant. Though Morton Grove and Niles will have to do construction to connect with the Evanston supply, he added, the cities will still save money buying from Evanston rather than Chicago. Morton Grove and Niles have two 10-year extensions at their discretion once the initial forty-year term has expired.
Mr. Stoneback said he anticipates rates will rise significantly in about 2019, adding, “We anticipate that the 5 million gallon treated-water storage in the parking lot opposite the water plant will [then] be complete, and that asset gets rolled into their share of the costs for the water plant.”
A later replacement of a major intake at the plant will also necessitate an increase. “Any time there is a major investment at the water plant, all of our wholesale water customers help to participate in that,” Mr. Stoneback said. He noted that since Chicago’s rates are so high, Evanston could still come in at a lower bid and get the full return on its investment.
Morton Grove and Niles would represent about 13.3 percent of the users of the water plant.