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Oak Park trustees weigh inclining-block rate options as consultants model equity tradeoffs
Summary
Consultants presented alternative water/sewer rate structures, showing sample inclining-block designs could lower many residential bills while shifting more cost to high-use commercial or institutional accounts; trustees asked for class-specific impacts and an equity analysis before choosing a direction.
Consultants from NewGen Strategies presented Oak Park trustees with alternative structures for charging water and sewer customers and asked for board feedback on which methodology to model in the village’s five-year rate plan.
Eric Koloki, a NewGen partner, reviewed uniform, inclining-block, declining-block and seasonal options and stressed that rate design determines who pays rather than how much the system must collect. "This is revenue neutral — you need roughly the same total revenue," Koloki said, adding that the example models assume $16,000,000 in variable-rate revenue for discussion.
In a sample aggressive inclining-block model presented by the consultant, typical residential customers would see about a 34% decrease in billed usage charges while some large nonresidential users would face substantial increases — the study’s sample showed a roughly 21% increase for an average commercial account under that scenario. Koloki noted the distribution is driven by a long tail of very high-use nonresidential accounts.
Trustees pressed staff to identify which customers occupy the high-use tail (hospitals, large institutional users, pools), asked whether multifamily properties should be treated on a per-unit basis, and requested an equity analysis that accounts for household size and income rather than meter size alone. Public Works Director Rob Spruill said staff will model customer-class impacts and potential guardrails (for example, limiting individual increases to a specified percent) before returning with recommended rate options.
Several trustees expressed interest in a hybrid approach that preserves per-unit treatment for multifamily accounts while applying an inclining-block structure to other customers; others urged caution about revenue instability if volumetric rates successfully suppress demand. Trustees also asked staff to incorporate possible changes such as monthly billing and to coordinate the rate study with capital needs driven by mandated lead-service-line work.
Next steps: NewGen and staff will develop detailed, class-specific modeling and a DEI-informed equity assessment for review by the finance committee and then the full board. A final recommendation on rates is expected later this year, with potential new rates effective in January 2027.
