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East Dundee to pursue 5% water/sewer rate increase after IEPA loan denial; board to consider bonds or outsourcing wastewater operations
Summary
Village staff told trustees an IEPA loan application for a standpipe rehabilitation was denied and recommended reapplying after improving project readiness; the board signaled support to move forward with a 5% rate increase for 2026 and to explore bonding and potential outsourcing of wastewater treatment to Fox River Valley Water Reclamation District.
Village staff presented an updated water and sewer rate study and an eight‑year capital plan totaling roughly $8 million and recommended steps to address anticipated capital needs.
Staff explained that an IEPA loan application for standpipe rehabilitation was denied because the project ranked in the middle among hundreds of statewide applicants; staff said they will redesign and advance project readiness so the village can reapply in 2026. "We came in about middle range against other projects," a staff member said, noting the state evaluates shovel‑readiness and community need.
Because IEPA funding is uncertain, staff said the village is budgeting for alternatives, including regular bonding. The board discussed the tradeoffs: bonds may lower borrowing cost when available but create immediate market‑timing and interest risks; spreading financing over time could reduce market timing exposure.
On rates, staff restated a prior recommendation and asked the board to consider a 5% water/sewer rate increase for 2026 (after a 5% increase last year). Trustees generally signaled agreement to proceed with 5% in 2026 while keeping open stronger rate adjustments if alternative revenues or loans do not materialize.
Trustees asked about comparative rates and reserve targets; staff said the village must maintain a roughly 35% reserve for contingency and that the 2026 draft budget currently projects the fund is under that reserve target without a rate increase. The board also directed staff to meet with representatives of the Fox River Valley Water Reclamation District to evaluate whether outsourcing wastewater operations could yield savings; staff said they will invite the district to a January meeting for further discussion.
