Village Approves 40-Year Water Supply Agreement with Evanston

 

GirlDrinkingWaterOn January 23, the Village Board approved an agreement with the City of Evanston to allow Morton Grove and Niles to purchase Lake Michigan water for 40 years beginning in 2019. Mayor Dan DiMaria thanked the Board for their long term planning in this inter-governmental cooperative effort. “This is a legacy decision”, he stated.  After including conservative estimates for infrastructure costs, Morton Grove is projected to save approximately $100 million dollars over the life of the contract.

Morton Grove currently purchases water from the City of Chicago. Since 2008, the water rate charged by Chicago has risen by 114%.  Because of these large and unpredictable rate increases, Niles and Morton Grove began working together in 2013 to evaluate alternative water supply options. The Villages received proposals for long-term water supply agreements from the City of Evanston and the Villages of Wilmette and Glenview. Both proposals offered a safe, high quality, reliable supply of Lake Michigan water, but the proposal from Evanston offered the best long term savings.

The 40 year agreement with Evanston includes an option for two ten-year extensions. Water rates will be calculated based on a fixed formula. The initial 2019 Evanston water rate is expected to be $.81 per 1,000 gallons. The Villages will need to construct transmission mains and other infrastructure to transport the water from Evanston to Morton Grove and Niles. The cost to design and construct this infrastructure is conservatively estimated at approximately $90,000,000, which will be financed by bonds. After adding the infrastructure construction and operations costs to the Evanston wholesale water rate, the total Evanston rate is projected to be $3.47 in 2019; 15% less than the projected Chicago rate. Larger savings will be realized after the construction bonds are paid off.  It is anticipated that the resulting savings will be utilized to make much needed upgrades to the existing Morton Grove water mains and other infrastructure.

Village Administrator Ralph Czerwinski noted that cost estimates are conservative; additional savings will be realized if the Village qualifies for low interest state and federal loans. The Village has begun an engineering study to determine the optimal route and financing terms for the new water mains and required infrastructure.

 

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