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STEVE McCLURE
WATER CONSERVATION
WARRANTS TOP PRIORITY

By STEVE McCLURE, Director, DCCA

This year's wet spring has brought welcome relief to many Illinois communities, parched by the drought of recent years. Even so, many municipalities still face an uphill battle in their efforts to provide adequate, safe water supplies to their residents.

In March, Lieutenant Governor George Ryan announced a new initiative to help smaller Illinois municipalities deal with water supply issues. This "Water Supply Assistance Initiative" will put into place a clearinghouse to serve as a contact point for all water supply questions and problems, referring these questions to the proper agencies for answer. In addition, this clearinghouse will serve as a liaison with all State agencies and the federal government, monitoring progress of each contact and serving as an outreach source to ensure public awareness of water supply resources and program assistance.

As DCCA Director, I have agreed to make up to $1 million available through the Emergency Public Facilities Set-Aside component of the Community Development Assistance Program (CDAP) — funds that will be used to assist eligible communities in correcting water problems.

I have asked Stewart Schrodt, Assistant Deputy Director of DCCA's Bureau of Program Administration, to serve as water supply "ombudsman." Stewart may be reached by calling the Local Government toll-free number, 1-800-562-4688.

This initiative is of utmost importance to those communities experiencing water problems that threaten public health and safety. But water conservation is a practice that should be followed by all communities — not just those already in trouble.

A good way to encourage water conservation is through water rates. The general authority to set water rates is given to local governments and may be found in Illinois Revised Statutes, Chapter 24, Section 11-130-8.

There are several pricing factors that have an influence on water rates. Many water rate ordinances include demand charges, water meter size, household fixtures, special surcharges, seasonal increases, fire protection fees, bond retirement charges, etc. This variety of charges often confuses customers, however, preventing them from knowing the exact cost of the water. As municipal officials, you should clearly inform customers of the charge per unit and how each unit of water is priced — this way, responsible customers can make knowledgeable decisions based on the price of the water. The key: simplify the rate ordinance, so that customers become a partner in the conservation effort.

Remember, various rate structures have differing impacts on water conservation. There are four major rate structures for pricing water. These include the flat rate, declining block rate, uniform rate and the ascending (increasing) block rate. Variations of these exist in the form of peak load pricing, seasonal rates and quantity discounts.

The flat rate does not support conservation and is often used by municipalities without water meters. It is simply a fixed price charged to a customer regardless of the quantity of water consumed. The rate permits waste, because neither the customer nor the provider knows the amounts being used.

The declining block rate does inform the customer of the quantities used, but it rewards him for using more. As the amount of water used increases, costs for

April 1990 / Illinois Municipal Review / Page 17


specific quantities decrease. Though this is perhaps the most popular rate structure used, it does little to promote the conservation of water.

The uniform rate is becoming more widely used. It is recommended over the declining block rate because each unit of water costs the same (the first gallon is the same price as the last gallon). This rate can be defended as being very equitable and is moderately effective in encouraging conservation. This is the rate that is generally recommended by our Local Government Management Services personnel when they present alternate rate structures in their water rate analyses for communities.

The ascending block rate, also known as an inverted or increasing block rate, has yet to become a popular method of pricing water. In this structure the customer is charged an initial amount for a given quantity of water and the rate increases as the usage goes up. This rate probably offers the greatest opportunity for discouraging waste and for encouraging conservation of water.

Since 1949, the American Water Works Association and American City Magazine have advocated the use of the gallon as a unit of measure. For those municipalities which still bill in cubic feet, much of the reluctance to change billing units has been the fear of large capital costs to replace meters. The water meters may continue to be read in cubic feet, but a computer can produce water reports and bills in gallons. The water rate ordinances can then be written in gallons.

DCCA helps local governments review their water user charges to ensure that the communities have sufficient revenue to provide for operational requirements, to meet debt obligations and to create reserves for maintaining their systems. These studies are provided at no charge to the community.

For further information regarding water rates, to request a water rate analysis, or for any other questions regarding local government, call the Office of Local Government Management Services on our toll-free hotline 1-800-562-4688 (LOC-GOVT). •

Page 18 / Illinois Municipal Review / April 1990


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