HomeMy WebLinkAboutORDINANCES-2017-095-O-178/22/2017
8/28/2017
9/19/2017
95-0-17
AN ORDINANCE
Establishing a New Wholesale Water Rate for
the Village of Skokie, Illinois
NOW BE IT ORDAINED BY THE CITY COUNCIL OF THE CITY OF
EVANSTON, COOK COUNTY, ILLINOIS, THAT:
SECTION 1: Legislative Statement. The City of Evanston is the owner and
operator of a water intake, filtration, treatment and pumping plant located at 555 Lincoln
Street, Evanston, Illinois. Evanston draws water from Lake Michigan for Evanston's
drinkable water, firefighting and fire protection needs for its community, and for
distribution a-nd resale to its wholesale water customers. One of the customers served
by Evanston is the Village of Skokie, which in turn supplies this water to Skokie
residents. Evanston supplies the pressures for the Skokie water system. This
arrangement meets Skokie's expectation that its water system be completely integrated
with Evanston's water system. Evanston also maintains a high level of redundancy in
the water service utilizing 3 points of connection/service, which benefits Skokie.
The Illinois Supreme Court provides that "[i]f a subject pertains to local
government and affairs, and the [Illinois] legislature has not expressly preempted home
rule, municipalities may exercise their power." Palm v. 2800 Lake Shore Drive
Condominium Assn, 988 N.E.2d 75, 82-83 (2013), citing City of Chicago v. StubHub,
Inc., 979 N.E.2d 844 (2011). The powers of a home rule unit such as Evanston are to
be construed liberally pursuant to Article VII, § 6(m) of the Illinois Constitution, and
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Evanston's powers as a home rule authority are: "...to be given the broadest powers
possible." Scadron v. City of Des Plaines, 153 III. 2d 164, 174 (1992). Home rule
municipalities are constitutionally conferred with tremendous authority and latitude to
address local issues and concerns, such as identifying and implementing a reasonable
wholesale water rate.
After December 31, 2016, Evanston and Skokie agreed to an interim water rate,
such interim rate which expires at 11:59 p.m. September 30, 2017. Under this interim
rate, Skokie paid Evanston $1.0797 per 1,000 gallons. Evanston fairly allocates water
rate increases and charges to all customers. In July 2017, Skokie raised the water rate
it charged to Skokie residents on the water supplied by Evanston, by 8.48%. Skokie
publically proclaimed its water rates: "will still be less than the water rates for Evanston,
Wilmette, Glenview, Lincolnwood, Niles, and several other communities", and
"...remains the second lowest among area comparable communities." See Skokie
Village Ordinance 17-8-C.
The American Water Works Association Manual of Water Supply Practices,
colloquially known as the "M-1 ", sets forth generally accepted industry standards for
setting a reasonable wholesale water rate. The 6th edition of the M-1 was relied upon
the City and its wholesale water rate valuation experts, in setting the Skokie rate
enacted in this Ordinance. The utility basis approach followed by Evanston is analyzed
in the M-1, such manual which states in pertinent part:
It is considered an appropriate method for calculating the costs of service
applicable to all classes of customers, but is particularly applicable to
those customers located outside the geographical limits of a
government -owned utility. [emphasis added] AWWA M-1, 6th Edition,
p.14
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The City Council and staff also reviewed wholesale water rates in several surrounding
nearby communities in determining the reasonable and appropriate water rate to be
charged to Skokie.
These rates are set forth in the following table:
Provider
Customer
Evanston
Evanston
Evanston
Skokie
Wilmette
Glenview
Winnetka
Northfield
Highland Park Deerfield, others
Northbrook
Riverwoods
Waukegan
Park City
Chicago
60+ other
municipalities
Glenview
Golf
Rate per 1,000 gallons
$3.09
$2.06
$1.78
$1.69
$2.69
$3.06
$4.71
$3.88
$3.38
Contract Expires
N/A
In controversy
2050
2033
2033
2036
2018
Varies
2066
Evanston also reviewed and considered applicable Illinois common law, including but not
limited to the Niles 11 case, in determining a reasonable rate to charge Skokie. By Skokie's
own admissions, and contrasted to relevant data points, its rate paid to Evanston is artificially
low, both in a relative and absolute sense.
Based upon all applicable ratemaking principles in the AWWA M-1, the rates
charged to dozens of similarly situated comparable communities, applicable Illinois law
(specifically including but not limited to the Niles Il water rate case), and the other
evidence by Skokie that its rate is too low, the City Council finds that it is rational and
reasonable to revise and set the new wholesale water rate payable by Skokie to
Evanston at $2.06 per 1,000 gallons.
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The City Council held meetings in compliance with the provisions of the Illinois
Open Meetings Act, considered the statements, points and authorities made in the
legislative Record, and received additional input from the public.
SECTION 2: The wholesale water rate of $2.06 per 1,000 gallons is imposed
for all wholesale water rates charged by Evanston to Skokie, effective for all water
supplied to Skokie as of 12:00 a.m. October 1, 2017.
SECTION 3: All ordinances or parts of ordinances in conflict herewith are
repealed.
SECTION 4: If any provision of this ordinance or application thereof to any
person or circumstance is ruled unconstitutional or otherwise invalid, such invalidity
shall not affect other provisions or applications of this ordinance that can be given effect
without the invalid application or provision, and each invalid provision or invalid
application of this ordinance is severable.
SECTION 5: The Legislative Statement in Section 1 is declared to be prima
facie evidence of the law of the City and will be received in evidence as provided by the
Illinois Compiled Statutes and the courts of the State of Illinois.
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SECTION 6: This Ordinance 95-0-17 is effective immediately.
Introduced: September 25, 2017
Adopted: September 25, 2017
Devori`Reid, City Clerk
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Approved:
Septembe 25, 2 17
Stephen H. age oO
Approved as orm:
r ,
W. Grah Farrar, Corporation Counsel