DuPage United Challenges Water Commission Tax

Glen Ellyn-based DuPage United continues to fight for the early elimination of the sales tax collected by the DuPage County Water Commission that is set to sunset in 2016.

Since 2006 DuPage United, a coalition of faith-based and nonprofit organizations headquartered at Faith Lutheran Church, has fought the countywide quarter-cent sales tax that supports the water commission. Debbie Fauks, a DuPage United member and trained actuary, said her research shows the water commission does not need the funds from the tax to provide quality water in the county.

The DuPage County Water Commission is an independent 13-member board. Six members are elected by area mayors and the commission chairman and the other six members are appointed by the chairman of the DuPage County Board. The commission's job is to transfer and sell water provided by the City of Chicago from Lake Michigan to 24 municipalities and unincorporated areas in DuPage County. The commission's funding comes from the sale of the water plus the quarter-cent countywide sales tax.

In March, the Chicago Tribune reported that an audit of the water commission turned up shoddy accounting practices and that $19 million in the commission's money could not be accounted for.

Former Water Commission member Liz Chaplin, whose term ended in July, said the commission currently pays $2.08 per thousand gallons of water it purchases from the City of Chicago. The commission, which operates a network of pipelines to bring the water west, then charges municipalities a higher rate.

When the commission was established the water rate was $1.95 per thousand gallons. Over the years the commission, subsidized by the quarter-cent sales tax, lowered the rate for municipalities to as low as $1.25 per thousand gallons, which was below the rate DuPage officials were paying Chicago for water. However, the rate has slowly increased and in May was hiked from $1.70 per thousand gallons, to its current rate of $2.08 due to the commission's financial woes.

The Village of Glen Ellyn pays the DuPage Water Commission $2.08 per 1,000 gallons. The village then charges residents $10.94 per thousand gallons. A typical household uses approximately 8,000 gallons per month and pays an average of $87.52 per month for water.

Fauks, a Glen Ellyn resident, said several DuPage municipalities, including Glen Ellyn, finance more of their budget through water markups than through property taxes.

Fauks explained the water commission tax was approved in a referendum that also allowed the water commission the right to issue bonds to pay for infrastructure repairs and replacement. The tax was passed to help pay back the bonds, Fauks said. However, Fauks said the sales tax, which was implemented across the entire county, even in areas not covered by the water commission, generated $30 million a year, while payments on the bonds were $13 million annually. The extra funds built up in a reserve fund of nearly $190 million.

In 2003 the county was able to secure permission to tap $75 million of the funds over five years to help pay bills. Municipalities were also awarded $40 million in rebates. But there was a problem. Former commission administrator Max Richter overestimated the reserves by $40 million. The forensic audit that showed $19 million unaccounted for also discovered the commission misspent $69 million in reserves.

Fauks said DuPage United approached the commission in 2007 regarding their concerns about the commission's finances—three years before the audit was conducted.

"We warned the commission about the financial problems, but they turned a deaf ear to us," Fauks said. "We're very concerned about what happened to that money and what it was being used for."

DuPage United wants the sales tax eliminated and the water rates back to a "sustainable level." They also want the commission's operating budget to be self-sustaining.

Terrfy McGhee, interim manager of the water commission, said if the sales tax is eliminated before 2016 then the cost of water will dramatically increase.

"People are not going to like to see their rates shoot up. We use the tax to supplement the water rates and keep it low for our customers," McGhee said.

McGhee said the tax is paid by DuPage residents as well as people who come into the county to shop. He said two of the biggest shopping areas in DuPage County are Oak Brook Shopping Center and Fox Valley Mall. Those shopping centers are on the border of the county and draw customers from several counties, McGhee said.

"That money supports our water system and allows us to sell it at a low rate to the municipalities," McGhee said.

But that argument doesn't suit DuPage United.

"This is about fiscal responsibility," Fauks said. "We don't need more sales tax when the entity that gets the money doesn't need it."

Fauks said DuPage United will continue to monitor the commission's finances, as well as new appointments to the commission. Due to the financial irregularities, the legislature passed a bill that calls for a slate of new members on the water commission. However, there is nothing in the bill that prevents the same commissioners currently serving from being reappointed.

Fauks said DuPage United is imploring the current commissioners to refuse to be reappointed to the board.

Chaplin, who was a county board appointee, said when her term was up this summer she asked county chairman Bob Schillerstrom to not rename her to the board. Although no longer a member of the commission, Chaplin said she will continue to be a watchdog over the commission and will continue to help DuPage United in its efforts.