The City of Peoria is collecting public input on the proposal to change its franchise agreement with Illinois American Water Company.
The proposal extends out the city's 5 year purchase option to 20 years. In exchange, the city gets more than a million dollars a year for a residential streets overlay program and another one-point-four million for work permit fees. The water company in turn passes on the cost to rate payers with a three-percent increase. But Peoria Public Radio’s Tanya Koonce reports the proposal is not setting well with some:
About 50 people attended the second public meeting on the subject of the City’s franchise agreement with Illinois American Water. More than a dozen people spoke, all against the idea in part or whole.
A chief sticking point is the rate increase that the contract provides Illinois American to pass on to customers. Some are calling it a regressive compounding backdoor tax. Eric Rothstein is a CPA working for the ‘Citizens for Water’ group, that opposes the proposal and supports the city purchasing the waterworks.
“It’s not as though Illinois American is not paying the money out of money it’s not able to recover from the rate payers. So it’s just a different form of collection from Peoria residents for the funding of streets and why not do it in a more direct fashion.”
The city says the water rate tax increase spreads out the impact, as opposed to say property taxes that not everyone pays. Former Peoria City Councilman Bob Manning served on the committee that over the summer reevaluated the city’s option to buy Illinois American’s Peoria holdings. He says there are other options for the city when in comes to paying for a residential streets overlay program:
“I’m pretty confident most of them don’t have the courage to do it through the property taxes which is where you pay for essential services like police, fire and roads. But they don’t want to do that for political reasons. They could look at doing it on the motor fuel tax. They could look at doing it on a number of different options of utilities we already have fees.”
Manning says further the city selling its purchasing option for 20 years would be a mistake, even though the city hasn’t exercised it since it’s inception in 1889.
“Our option of looking at this every five years is the only leverage to hold the water company accountable. And to give that up for what? A million dollars in road repairs? It simply isn’t worth it in my opinion.”
But the results of the survey conducted last year just before the city’s buyout consideration window disagree with Manning’s assertion:
“Something that I think is important to keep in mind is that we asked our citizens in September how they felt about this and 90 percent of those surveyed said they wanted us to continue working with the city on an agreement rather than spending the resources to continue discussing the buyout very five years.”
That’s Karen Cotton, Spokeswoman for Illinois American Water in Peoria. The survey she’s talking about sampled 400 registered voters in the city and had a margin of error of plus or minus nearly 5 percent. 77 percent of the people in that same survey reportedly oppose buying the water company.
Still the significant questions and concerns voiced were heard loud and clear by city staff and the council members at the public hearing. Peoria City Manager Patrick Urich:
“We released this as the agreement that we had come to agreement with the water company over. But following the input from the public and the council we’re going to take a look at that agreement again.”
Urich says they’ll make modifications to the proposal, share it with outside legal counsel and then sit down again with the water company before presenting a revised agreement in about a month. Additional public hearings are expected after the franchise agreement language is re-crafted.