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Passed: Bill to aid public takeover of water systems

A bill to ease municipal acquisition of private water and sewer systems passed both houses of the General Assembly yesterday.

SB 3749, a version of an earlier bill sponsored by State Representative Renee Kosel (reported here in April) changes the way water and sewer systems are valued in eminent domain proceedings.  Previously valuation was based on projections of annual earnings; under the new law they would be based on the cost of acquisition for the existing utility.

That would remove the value of facilities built by developers and paid for by homeowners. The bill also allows depreciation to be taken into account.

Food and Water Watch is calling on Governor Quinn to sign the bill.

Dozens of suburban and downstate communities served by Illinois American Water Company, complaining of high rates and poor service, have discussed municipal takeovers.  According to the Tribune, IAW’s rates are more than four times those of neighboring communities with municipal ownership.  (For more see last October’s Newstip.)

In April, IAW rates in Chicago suburbs went up by 26 percent.  Yesterday IAW announced it would refund customers in Pekin who were charged nearly double the approved rates, the Peoria Journal-Star reports.

(In 2004 the Illinois Commerce Commission denied a petition by the City of Pekin to take over its water system from IAW.  Pekin cited high rates, burst pipies, and malfunctioning hydrants.  In 2006, mayors across the state backed a bill that eliminated the requirement of ICC approval for municipal takeovers of privately-operated water systems.)

Meanwhile, Melrose Park Mayor Ron Serpico announced today that seven communities served by the Melrose Park Water Consortium will receive rebates of over $700,000.   Northlake, Maywood, Melrose Park, and other communities contribute to retire debt incurred when the system was rebuilt in 1997, and the rebate is possible because “strong management practices have minimized the need for repairs and new equipment,” Serpico said.

Over the past three years the consortium has refunded over $3 million to member municipalities.

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Category: privatization, water

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