June 9, 2010
Last week the Illinois General Assembly adjourned for the summer. The House and the Senate sent numerous bills to Illinois Governor Pat Quinn to either sign or veto. One such bill is Senate Bill 580, which would restructure the existing DuPage Water Commission.
The DuPage Water Commission operates and finances the systems required to bring Lake Michigan water service to communities located in DuPage County. Beginning in 1955 with the Tree Towns Commission and expanding into its current form, the Commission now supplies 25 DuPage County municipalities with Lake Michigan water.
The Commission is run by a General Manager, who is governed by a 13-member Board of Commissioners. The DuPage County Chairman appoints seven of the commissioners, one of whom is designated as Chairman. The remaining six board members are appointed by a vote of the mayors of those municipalities that the Commission serves. The Commission collects water fees from customers and levies a 0.25% sales tax. It operates as a separate legal entity.
Last fall members of the Commission discovered that nearly all of the Commission’s reserve funds had been depleted. According to a forensic audit completed at the behest of the Commission and published on March 2, 2010, the Commission’s unrestricted funds were exhausted as a result of the Commission’s April 2007 approval of a $40 million rebate to its charter customers, a $0.20 water rate reduction, a pre-existing imbalance between water revenues and expenditures, expenditures on new construction projects and a decline in other revenues. The report also noted that unrestricted cash reserves were significantly overstated by the Financial Administrator and this was a part of a larger pattern of erroneous and misleading information put forth by this individual.
Senate Bill 580, which has been passed by both the House and the Senate and is awaiting action from Governor Quinn, was drafted in response to these revelations. The legislation, as it now stands before the Governor, will result in the elimination of the 0.25 percentage point sales tax levy for the Commission by 2016 and implement additional oversight controls. To make up for this lack of revenue, water rates will be increased for the municipalities and unincorporated areas that receive water from the Commission. The legislation stops short of placing the Commission under the direct control of the County, however, which was originally proposed by Illinois State Senator Dan Cronin and State Representative Randy Ramey.
In its analysis of DuPage County’s FY2007 budget, the Federation called on the County to explore the possibility of consolidating the water commission within DuPage County government. We continue to urge the County to look for cost-savings and efficiencies as part of its relationship with the Water Commission.