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C4CH

Post Office Box 43

Clarendon Hills, IL 60514

CitizensForCH@gmail.com

© 2019 Citizens For Clarendon Hills

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Water Fund Made a $1.4M Profit in 2017 High Taxes and High Water Rates Damage Your Property Values


Dear Neighbors,  Excessive property taxes and high water rates are hurting all of our property values in CH!!  Our local leaders can take action and hit the pause button on spending. Here are the facts on the CH Water Fund;

  • 3rd highest water rates in Chicagoland (ref. Chicago Tribune) -$4.7M in cash in CH Water Fund (water fund balance 9/30/18)

  • $1.4M in operating profit in 2017 (profit = revenue - expenses)

  • $3.2M is planned for spending this year to replace mains, which can be delayed to lower water rates and extend lifespan. The spending is the highest in the history of CH.  A "use it or lose it" government spending mentality seems to prevail.

  • CH has had no serious water main leaks and has a lower risk since significant amounts of water lines were just replaced.  We understand there are old pipelines, yet replacement now does not appear mandatory or financially prudent.

  • CH bought new equipment and has staff for leak repair, if any.

  • No 3rd party expert critical review or audit has been done on the spending, rates and assumptions - despite requests 

  • No tax cap is placed on the water rates.  A recent freeze does not roll back the excessive water rate implemented.

  • Spending in the water fund is planned to be at an all time high in CH History.

  • Village staff recommended and implemented a shift of public works assets and staff into the water department, yet the water department still produced a $1.4M profit in 2017, even after the people and assets were shifted

  • Public works assets like a new loader and dump truck were partially paid for through the water fund instead of through public works despite the water department hardly ever using these assets (because there are few if any leaks).  

  • Our 1.8 square mile town of CH is very small.  Small savings are meaningful and delaying a year or two on replacement could dramatically lower costs and water rates with little risk 

  • Property values are negatively impacted by high water rates and high taxes

  • The staff village engineer is being replaced. The consulting firm (Burke) recommended acceleration the spending while Burke gets paid for design and oversight fees for the water main replacement and road construction work that isn't needed this year.  Burke recently took on the additional role of CH in-house village engineer for a brief period of time.  The conflict of interest here must be pointed out as another reason for a critical review by parties not inside the system and delay in construction .C4CH did not accuse the current Board of rubber-stamping a water rate increase, because as pointed out there was no increase this year.  We did however ask the current Board to stop rubber-stamping the Village Manager on the water rate and water fund issues.  The water rate should be dramatically decreased, and the Board rubber-stamped the Village Manager's choice to keep our high water rates in place.  A 2011 ordinance which included 5 years of increases was rubber-stamped by all, including the previous caucus endorsed Board.  

Recommendations C4CH lists out facts and makes recommendations that will significantly reduce the Water Rates in CH plus help place prudent fiscal controls on future spending thru an outside water fund expert audit managed by a Board Committee.  The water rates in CH are the 3rd highest in Chicagoland and the CH water rates can be greatly reduced for the long term with these 3 actions;   1. Issue 20 Year Bonds for replacement of pipelines and other long term assets as is the normal and prudent practice instead of using cash hoarding causing inflated water rates. 2. Delay next years planned $3.2M spending by 1-3 years by assessing risk and needs annually.  There will be a need to replace lines but that need is NOT this year.  Also replacing roadways years before the end of their useful life is causing taxes to increase prematurely.  One of the largest spends in the history of the water fund should be delayed from 1-3 years to allow for better a more detailed critical assessment and lower rates. 3. Hire an outside expert in water department operations for a critical review and audit.  Look at a more effective, efficient, and lower cost approach using industry best practices.  Our Village Manager, Kevin Barr opposes C4CH's proposition, yet it is our experience when a civil servant opposes an audit there might be even more issues.  The audit must be managed by someone other than the Village Manager.  Obvious issues such as high rates, replacing pipelines before the end of their useful life, excess equipment, etc... should be examined.  We only need look at D86 a few short years ago when a proper outside critical auditor found over 60 significant and material matters that needed Board attention.  We see no credentials on staff that have best industry practices nor can audit a water fund on their resume.  C4CH feels even more strongly that an audit is required after being rejected by the Village Manager. We would be happy to help draft the scope of the auditor.  Editorial Points on Water Rates and Water Fund C4CH wants to shed light on the high water rates, large cash balance, high (cash) profits being generated, apparent rush to replace roads and pipelines before the end of their useful life (apparently to use up the excessive cash as quickly as possible), and to align other financial matters regarding the water fund with taxpayer interests. The unwillingness to pause the spending and freeze taxes plus the clear problems with transparency/reporting issues on the water fund are worrying.  Property values are not increasing yet property taxes are increasing alongside water rates. CH has repeatedly called for the Village Manager and Trustees to pause all capital spending for a 3rd party critical assessment (audit) of all aspects of the water fund and corresponding road program.  Our small town has never spent this level of money in its history. Outside critical expertise in the multifunctional aspects of running a water business might improve the approach.  Our Trustees have no managerial experience in this area, and our staff has minimal experience in these areas.  We have a new engineer starting shortly and a 1 year pause to revisit spending plans and rates would be prudent. C4CH calls for a 1-2 year freeze on both taxes and infrastructure spending to make a detailed evaluation and perform a critical review of current practices with the water fund, water rates, and replacing assets well before the end of their useful life. Please forward comments to the Village President Len Austin (laustin@clarendonhills.us or at 630-286-5420) or you may send your comments to C4CH and we will forward confidentially. _____________________________________________________

Fiscal Conservatives - if you are interested or have a recommended candidate for D86, D181 or the Village of Clarendon Hills, please email us back as we may be able to support your efforts. ______________________________________________________

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Respectfully, Your Neighbors - C4CH

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