DeKalb city leaders express support for 3.3% water rate increase

DeKALB – To keep up with the rising cost of inflation, DeKalb city leaders decided this week to codify an ordinance for imposing a 3.3% increase to the city’s water rate.

The rate change, which is effective with the July 1 billing cycle, will result in a residential customer paying $42.33, up from $40.97.

City staff cited inflationary pressure for hiking the water rate.

“This is less than an inflationary increase, which was considered by the council two meetings ago,” City Manager Bill Nicklas said. “In terms of a local household, the calculated difference would be about $1.36 a month.”

Seventh Ward Alderman John Walker asked if Nicklas would address the two residents’ who frequently attend public meetings and their concerns shared about water funds being used to pay for administrative costs.

Nicklas replied, saying it’s something the city is tapped into more.

“Under other administrations, other councils, when there were difficulties balancing the general fund, other funds were used to tap into,” Nicklas said. “In some cases, there’s a legitimate nexus between somebody in the finance office whose dealing with water payments and the water fund. It was more generally used.

“The numbers weren’t always correlated to actual service ... on behalf of a certain fund. The most egregious of these we learned was the TIF fund because, I mean, we went through a forensic audit to learn that there were some years where in which $800,000 was used to offset quote administrative costs incurred by city officials in the performance of their duties.”

Administration spending from the TIF fund has not been a practice in DeKalb city government since 2019, officials said.

Nicklas said the city hasn’t been able to get a complete hold on administrative spending from the water fund.

“The hole that was dug over almost two decades is pretty deep,” Nicklas said. “That’s something every year we wrestle with a little bit and do our best with, but there still are some funds that are used for outside [work]. Again, I would say it’s a work in progress.”

When questioned by 6th Ward Alderman Mike Verbic about the water fund in April, Nicklas pushed back against the idea that it could pay for administrative expenses as well. As an enterprise fund, it is meant to cover its operating and capital expenses using its water sales and service fees.

“That’s all part of the enterprise,” Nicklas said. “It just doesn’t happen by itself. ... That overhead includes this consulting work. It does tells us what we need to fix and when we need to fix it, too.”

Walker questioned if it bodes well for local government on the city’s part to be dipping into the water fund for administrative costs as it has been.

“What are the pros and cons of that?” Walker asked.

Nicklas said it comes down to the city wanting to fulfill its obligations to customers.

“Most of what we pay for is directly to people who are performing services on behalf of water-related services,” he said.

The 3.3% water rate increase received City Council approval in April.

A water rate is a combination of a minimum flat fee billed bimonthly that varies according to water meter size and a fee tied to water consumption, city documents show.