Illinois politicians collected about $400,000 in recent years from a pair of companies that dominate the controversial business of privatizing municipal water systems.
Since 2010, Pennsylvania-based Aqua America and New Jersey-based American Water Works, gave campaign contributions to Democratic and Republican legislators as well as local officials, Illinois State Board of Elections records show. House Speaker Michael Madigan (D-Chicago) and Senate Minority Leader Christine Radogno (R-Lemont) are among officials scoring sizable donations — $12,500 and $17,500 respectively.
The donations were made as companies look to expand their base in Illinois. The opportunities seem to be ripe as local governments struggle with aging infrastructure — an issue related to lead poisoning in Flint, Michigan — and revenue declines, nudging officials to turn over services historically provided by public bodies to private businesses. The two companies also successfully pushed for a state law, passed in 2013, aimed at making it easier to acquire a water system while simultaneously raising its rates.
Publicly owned water systems still serve more than 90 percent of all water customers in the state. And despite the hard sell from Aqua America, American Water Works and other private companies, some municipal officials warn that privatization can lead to unforeseen problems, such as untenable rate increases for residents. When a private company takes over a water system, decisions on rate increases are taken out of the hands of local officials and instead decided by a state utilities regulator.
“Initially, it seems like a great deal for the community,” said Bolingbrook Mayor Roger Claar. “The reality is [these communities] get rate increases like they never imagined.”
Bolingbrook, Homer Glen, Lemont, Romeoville and Woodridge are suing American Water Works and its affiliate American Lake Water to exercise eminent domain powers and take control of a company-owned pipeline providing Lake Michigan water to northern Will County. According to the 2014 complaint, residents experienced a “substantial increase in water rates over the past decade.”
Without providing specifics, a spokeswoman for Mayor Rahm Emanuel said the city of Chicago considered privatization proposals but isn’t pursuing them. The city of Chicago has raised rates in recent years to improve water and sewer systems.
“This is not a new idea and has surfaced as an option several times over the last few decades,” spokeswoman Shannon Breymaier said in a statement. “This administration has been presented with various options related to the possible privatization of the water and sewer system, but there are no plans to move forward with these possibilities at this time.”
Elsewhere, some Illinois towns face revolts from residents who fear turning their drinking water and sewer operations to a private company will result in steep rate increases and loss of local control. Since March of last year, four downstate communities — Chenoa, Monticello, Mount Vernon and O’Fallon — backed off plans to sell or lease their water operations.
In Arthur, a village of about 2,300 people near Champaign, residents voted March 15 against a plan to sell its public water and sewer system. The ballot issue was non-binding and Arthur hasn’t ruled out privatization despite almost 80 percent of voters saying they don’t want it, Village President Matthew Bernius said.
In January, Arthur selected the state affiliate of Aqua America as buyer of its water operations in case the village goes ahead with the sale, estimated at $5.6 million. Prior to the March ballot issue, the company helped organize a campaign in favor of selling, including producing a promotional village video. The company also offered to reimburse the village for costs of a consultant if a sale goes through.
A company spokeswoman said it’s “customary” to reimburse municipalities for some costs related to a purchase. As for political contributions, Aqua America officials wouldn’t comment but an American Water representative said her company “needs to have a voice in the hall of government” and supports candidates who “share our commitment to investing in Illinois’ aging infrastructure.”
Those improvements come at a price, a Better Government Association analysis found.
Since 2010, seven municipal water or wastewater systems in Illinois, serving between 300 and more than 40,000 people, were sold or are in the process of being sold to American Water or Aqua America subsidiaries. The largest of those systems — serving about 44,000 residents — is in Cook County, mostly unincorporated land near Glenview. Others are downstate in Jersey, Kankakee, LaSalle and Livingston counties.
Consumer rates rose at three of the seven systems after the sales. That includes an almost 70 percent increase for an average monthly sewer bill in an area housing a mobile home park of 1,300 people in unincorporated Bourbonnais. Aqua America, which bought the system in 2012, said the increase is necessary, in part, to pay for $1.1 million in needed improvements.
Rachael Shelton, a longtime resident and retiree, waits for laundry to pile up high and sparingly flushes her toilet to save money on water and sewer bills.
“It gets frustrating,” Shelton said. “My husband and I are on fixed incomes … Our money is tight.”