GLENWOOD | The village will sue Chicago Heights over a contract language dispute regarding ownership of the water line through which both municipalities receive water from Hammond.
Village President Kerry Durkin said it is Glenwood's opinion that the village is an equity owner of that line, while Chicago Heights Mayor David Gonzalez contends no other south suburban communities share ownership of the line with Chicago Heights.
Gonzalez attended the Glenwood meeting Tuesday and told village trustees that five communities — Chicago Heights, Ford Heights, Glenwood, South Chicago Heights and Thornton — take approximately 8 million gallons of water per day from Hammond, and that Glenwood takes 14 percent of that amount.
Gonzalez suggested the operations and maintenance costs of transmitting that water be based on the amount each individual municipality consumes.
Durkin said Glenwood typically pays between $30,000 to $40,000 a year in operations and maintenance costs, but Glenwood Village Attorney John Donahue said Chicago Heights is proposing that Glenwood pay $489,000 annually.
Durkin said if Glenwood is identified as an owner of the line "this whole process of negotiating an (operations and maintenance) cost as a customer ceases to exist."
The village's decision to move forward with litigation occurred after a lengthy closed session and after Gonzalez had left the meeting.
Gonzalez updated the Glenwood trustees on the federal lawsuit between Chicago Heights and Hammond that resulted when a new water rate could not be agreed upon to replace the 30-year deal that expires this month.
"The city of Hammond has decided to take that rate from 57.5 cents to a minimum $2.20 per 1,000 gallons," Gonzalez said.
Chicago Heights maintains that the Hammond offer is unreasonable and Gonzalez said the rate of $2.20 per 1,000 gallons would be for just the first two years of the proposed 20-year contract. He said the rates after that period would be tied to 88 percent of whatever the city of Chicago pays for water.
"Our argument is that the Hammond Water Works is a regulated company and a regulated company is not supposed to make a profit," Gonzalez said.
Also after the closed session, the Glenwood Village Board voted to approve a $1.63 water rate increase.
Durkin explained the village's hands were basically tied even though its water contract does not officially expire until next year.
"Our contract for water states that as Hammond adjusts the water rate to Chicago Heights, that cost is passed through right to us," Durkin said.
Currently, Chicago Heights pays Hammond for water and Glenwood pays Chicago Heights for its share.
Glenwood water customers will see the increase in their bills at the start of the new year.
"Ultimately, this rate is dependent upon the litigation that is ongoing (between Hammond and Chicago Heights)," Durkin said. "If the litigation brings a lower rate, the money will be refunded to the customers."
Durkin said the water rate increase will have more of an impact on large industrial customers as opposed to individual homeowners.