Illinois American touts benefits of Alton selling sewer system and plant
Alton’s sewage treatment plant reportedly needs millions of dollars in upgrades, which Illinois American Water would take over if the utility buys the city’s sanitary sewer system and the plant.
Linda N. Weller | The Telegraph
ALTON — According to its proposal to buy Alton’s sanitary sewer system and treatment plant, Illinois American Water is the largest publicly traded water and wastewater provider in the state.
The company says it serves about 1.3 million residents in 129 communities, and owns and operates 10 wastewater treatment facilities. The company’s proposal touts the following benefits to the city if it sells the system to the utility:
• Capital investment and regulatory compliance — “The city would be alleviated of the burden of the long-term control plan to separate the existing, combined sewer system (stormwater and sanitary lines) and needed investments to the wastewater treatment facility.” Other work includes wet weather flow retention/treatment and other inflow and infiltration issues.
• Long term rate stability — “Capital improvement costs are allocated across a larger customer base creating less impact on individual customers.”
• Funding for city initiatives — “The city would be able to access funds currently committed and reserved for its wastewater enterprise, recognize significant financial gain from the acquisition price and collect new revenue from additional property taxes paid by Illinois American Water.”
It further says the sale would eliminate debt related to the wastewater system; unlock funds currently committed and reserved for the city’s wastewater enterprise, as well as provide financial gains from the acquisition price; fund important city initiatives; create a new revenue stream through property tax revenues the city is not currently collecting; provide the option of a franchise 10 fee or municipal utility tax for additional revenue; and customers would receive a single invoice for both water and wastewater services.
It also says since the expensive, immediate and long-term costs of capital improvements to Alton’s aging wastewater system would be spread wide — across the utility’s customer base instead of being borne by city residents only. Illinois American Water “has the ability to offer maximum benefits for rate stabilization to Alton customers,” with the ICC having oversight of rates.
It also says the wastewater system would be integrated into the company’s network, which is monitored 24 hours a day, 365 days a year by skilled operators.
The proposal addresses city employees’ concerns over job security:
“Illinois American Water will offer all existing city of Alton wastewater union employees and the department head(s) the opportunity to continue in their current roles within the Alton wastewater operation and service area at not less than their current salary. The company will set its own terms and conditions of employment, but shall make available to city of Alton employees hired by Illinois American Water comparable compensation and benefits consistent with Illinois American Water’s existing compensation and benefits strategy. Of Illinois American Water’s approximately 450 employees, more than 300 are represented by labor unions…. The current city of Alton wastewater management team will be offered the opportunity to continue in their existing roles. Their experience and knowledge will ensure a seamless transition and continued reliable operation of the facility and service to customers … In recent years, more than 35 percent of Illinois American Water’s new hires were diverse.”
Other issues
Two studies that the city commissioned still are ongoing, one of them is about repairs needed at the treatment plant and sanitary sewer system. The other study is a second-phase look into feasibility of the city opening a resource recovery facility (RRF) at the wastewater treatment site, 19 Chessen Lane, to generate revenue. The plant would turn sewage, restaurant waste and other commercial, high-strength wastes into dewatered solids for fertilizer, ammonia sulfate struvite and renewable natural gas or gas credits, which Alton would sell. The city also could charge tipping fees.
Aldermen have not yet given the go-ahead to proceed with the project, as they await results of that second study, which is evaluating advisability, costs, revenues and product sources for a bio-solid plant.
If Alton did proceed with the RRF, the city would own the plant, but the water company’s experts would collaborate with Alton’s consultants and staff “to help develop a cost-effective and successful project,” the proposal says.
The company has acquired other properties and has a “viable transition plan,” and would hold public meetings, send out informative mailings and use local and social media to educate customers during the process.
The proposal says the company would continue providing treatment services to Godfrey and Bethalto that now feed into the Alton plant, but: “Based on the nature of our business, these inter-governmental agreements may need to be renegotiated on terms and conditions acceptable to the company.”
Reach Linda N. Weller at 618-208-6450 or on Twitter @Linda_Weller
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