Harvey, Chicago settle water bill dispute, Homewood awaits report on water system

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Harvey, Chicago settle water bill dispute, Homewood awaits report on water system

January 23, 2015 - 21:08
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A ruling in the court case between the cities of Chicago and Harvey over Harvey's delinquent water bill was described by the judge as a balanced deal, according to a Chicago Tribune report, but it won't have much effect on the situation from Homewood's perspective.

Chicago didn't get court supervision over Harvey's water finances, as it requested, but Cook County Associate Judge Rita Novak ordered Harvey to pay $18.5 million in delinquent bills, with more than $6 million in penalties waived.

Homewood officials have been watching the case closely because the village buys its water from Harvey, and officials had hoped the court would grant Chicago's request for court oversight of Harvey's water system finances. Flossmoor, in turn, buys water from Homewood. 

"It really doesn't affect us," Homewood Village Manager Jim Marino of the settlement. "We continue to make our payments." 

If Harvey defaults on the payment plan initiated by the new deal, Chicago could begin collecting payments from Harvey's customers, including Homewood. Homewood officials have said the village is willing to do so.

The village's concern has been whether the payments it makes to Harvey are being used to maintain the water system the village depends on. The Tribune notes that Harvey has used water revenues to cover budget shortfalls elsewhere.

Marino said the village's contract calls for Harvey to use 15 percent of its revenues for system maintenance.

"We're concerned that's not what they are doing with the money," he said.

Homewood has used a provision of its contract with Harvey to verify the water system is being properly maintained. 

In October, Homewood trustees approved a contract with engineering firm Baxter & Woodman for $88,050 to conduct an inspection of Harvey's water system. Marino said the company has conducted several site visits but has a few more to do that will have to wait until the weather warms up some. 

He said once the inspection is complete, the firm will provide a report to the village. 

"That will tell us the status of their infrastructure and if there are areas of concern," Marino said.

The village's contract stipulates that if problems are found and Harvey cannot make repairs, Homewood can do so and get reimbursed for costs by withholding a portion of payments, Marino said.
Homewood has purchased water from Harvey for about 30 years. The current contract is in effect until 2022.

The contract allows Harvey to increase the rate 3 percent or the consumer price index, whichever is less, so if Harvey officials decide to raise rates to help pay the overdue bills, Homewood water rates should not be affected.

Two Homewood trustees asked village staff to see if Flossmoor would be willing to share some of the costs of the inspection.

Marino said he inquired with Flossmoor officials but did not receive any indication the village would contribute.
 


Related stories:
Chicago, Harvey reach settlement on unpaid water bills (Chicago Tribune, Jan. 20, 2015)
Village officials: Harvey's water finance woes not likely to affect Homewood water bills (The Chronicle, Sept. 5, 2014)
Harvey ordered to pay $26 million to Chicago (The Chronicle, Nov. 21, 2014)
Ruling in Harvey water suit less than Homewood officials hoped for (The Chronicle, Sept. 23, 2014)


Contact Eric Crump at [email protected]