Palos Hills was the last suburb to approve to Oak Lawn’s Regional Water System Agreement.
The current water supply agreement between the Village of Oak Lawn and the villages of
Orland Park, Tinley Park, Mokena and New Lenox and the City of Oak Forest expired in 2011.
Those towns are in the process of collectively negotiating a new long-term water supply agreement that will ensure a supply of water to each community for generations to come.
“We are not a growth community and we are being asked to partake in this agreement where we will be building piping to better service other communities that are growth communities,” Public Works Director, Dave Weakley, said at Thursday’s City Council Meeting.
The City of Palos Hills is being asked to pay its proportional share of the project estimated at $7.9 million. The cost of the project contributed by Palos Hills, Palos Park and Chicago Ridge will be used to fund and build piping along southwest highway.
Palos Hills also has an additional expense to modify the pump station and meter vault located on 103rd St. just west of Harlem Ave., estimated at $800,000 to $1 million and that raised a red flag with one Palos Hills alderman.
“Why can’t we get together with other municipalities involved with this and pull together and fight this?” Alderman Mary Ann Schultz (5th Ward) said.
Mayor Jerry Bennett said that the city’s options are limited and if they do change to another water source, costs will definitely go up.
“Should the city decide to seek water elsewhere, the Village of Oak Lawn will work with us as we go through the process of disconnection,” Weakley added.
While this is happening, Weakley said Oak Lawn would convert Palos Hills from a wholesale customer to a retail customer and start charging Palos Hills a retail rate, currently at $5.70 per 1,000 gallons. The city’s current wholesale rate is at $3.14 per 1,000 gallons. If the city decides to switch to Oak Lawn as a retail supplier, Oak Lawn will only be a retailer at the point of connection. They will not be responsible for water main breaks or other damages that may occur throughout the city.
Weakley said the city has no other reasonable option than to accept the terms presented by the Oak Lawn for cost participation in the construction of the Oak Lawn Regional Water System.
“It’s Oak Lawn’s water system and we have held up the process hoping for a compromise,” Bennett said.
The city is planning to take out a 20-to-30-year bond, to finance its share of the project, which will be paid for through the city’s capital improvement funds. Oak Lawn will be presenting a timeline with the requirements Palos Hills will need to complete in order to become a member of the regional water system. The official voice approval and paperwork will be signed at an upcoming city council meeting.
The five towns began negotiations in 2009, collectively hiring legal and engineering consultants to assist them. The toughest part of the negotiations was figuring out each town’s proportionate share of the costs. Besides the level of water usage, the complex formula factors in distance from Oak Lawn, electrical cost and a town’s future growth.
Under the 40-year agreement, negotiated by officials from Tinley Park, Orland Park, New Lenox, Mokena and Oak Forest, the water supply from Lake Michigan shared by the towns will double from 55 million gallons a day to 110 million, and officials will build a second supply line to create a redundant looped system. The additions are expected to meet the demands of a growing population and will allow the towns to limit or remove summer water restrictions.
With support from area congressmen and state legislators, Oak Lawn secured a $102-million low-interest loan from the Illinois Environmental Protection Agency to pay for most the system improvements and will be reimbursed by its customers over the 40-year period. This means that water rates will increase to pay for the project.
Among the 12 users in this regional system, Orland Park will pay the most for the project, 22.5 percent, with Tinley Park chipping in 20.4 percent, New Lenox 11.6 percent, Oak Lawn 9.9 percent, Mokena 6.8 percent and Oak Forest 6.6 percent. The contracts for Country Club Hills, Matteson and Olympia Fields expire in 2016 but Oak Lawn is hoping to get them on board, as well, before then.
Officially, the regional agreement is not finalized until Chicago Ridge, Palos Hills and Palos Park sign on. Their water contracts with Oak Lawn also have expired, continuing for now under the previous terms. Palos Park signed onto the agreement in January and Chicago Ridge agreed early this spring, leaving Palos Hills the last man standing in order for the project to begin.