100-year, $1 billion deal to send Chicago water to Joliet gets committee OK

Chicago would sell Lake Michigan water to Joliet for 100 years under a $1 billion deal with a water rate cap that had an influential alderman questioning whether city residents were getting hosed by comparison.

The agreement approved by the City Council’s Finance Committee would establish a “water rate cap” limiting annual increases paid by Joliet customers to the annual consumer price index or 5%, whichever is less.

The initial rate would be set after a “ten-year cumulative look back” on the consumer price index. Water is expected to begin flowing in 2030 — after Joliet builds a 31-mile pipeline needed to connect to the Chicago system and makes additional infrastructure upgrades at the Southwest Pumping Station and at Durkin Park. That work will cost up to $800 million.

Former Mayor Rahm Emanuel more than doubled Chicago water rates — followed by annual increases tied to the cost of living — to bankroll a massive overhaul of Chicago’s aging water and sewer infrastructure.

The burden on Chicago consumers was compounded by a 29.5% surcharge on water and sewer bills imposed during the Emanuel administration to save the Municipal Employees Pension Fund.

That’s apparently why Ald. Jason Ervin (28th), chairman of the Council’s Black Caucus, demanded Chief Financial Officer Jennie Huang Bennett provide aldermen with a specific comparison between water rates Chicago residents and businesses pay and the rates that will apply to Joliet consumers.

“If you want your residents to pay higher [rates] than what we’re selling it for, that’s on you. But I want residents of the West Side of Chicago to get the best deal possible for the water that they’re purchasing. If somebody’s getting a better rate, we want that same rate for our folks as well,” Ervin told his colleagues.

“If somebody’s getting a big discount, our residents should also have that discount. ... Our residents helped build the system. …. I understand we want to spread the cost out amongst others. But, we should not be giving another municipality a better deal than we’re giving our own residents.”

Bennett said comparing Chicago water rates to the “wholesale rate” it sells for is not an “apples-to-apples comparison.”

“We also have to pay for our own water distribution costs,” the CFO said.

She argued the Joliet deal would ultimately “benefit the rates” of Chicago residents and businesses “because we’re sharing more of these costs with a broader set of customers.”

Ald. Michele Smith (43rd) agreed the $24 million-to-$37 million annual revenue infusion from Joliet would help to “offset some of the costs of running those huge” water filtration plants that “today are running at half-capacity.”

Lawsuit settlements endorsed

In other action at Monday’s meeting, the Finance Committee agreed to pay $575,000 to settle two more lawsuits stemming from allegations of police abuse.

The closest vote — 14-to-13 — will authorize a $400,000 settlement to resolve a wrongful death lawsuit filed by Pamela Anderson, whose son was killed by Chicago police officers in September 2015 in a shooting that the Civilian Office of Police Accountability ruled was justified.

James Anderson suffered from “mild mental illness,” was taking “medication to control his symptoms” and emerged from his bedroom carrying a box-cutter “in each hand.”

But, First Deputy Corporation Counsel Renai Rodney said “some aspects exposed the city to liability” if the case went to trial.

“Plaintiff will seek to exploit the officer’s decision not to call a sergeant to the scene prior to entering the home, not to call someone trained in crisis intervention and not to attempt to speak to James through the door to assess his mental state, rather than opening the door and engaging him in a confined space without knowing how dangerous or violent he was,” Rodney said.

The second settlement — for $175,000 — was approved 21 to 6. It goes to Ashanti Franklin, whose family was terrified by a raid on the wrong address in March 2017.

Ald. Chris Taliaferro (29th) the former Chicago cop now chairing the Council’s Committee on Public Safety, argued the settlement was too high and set a “dangerous precedent.” The cost, he said, should be shared by other agencies participating in the task force conducting the raid.

Rodney acknowledged the Chicago Police Department has “task force agreements with its federal law enforcement partners,” but they hold CPD harmless … if they were later found liable of some type of conduct while executing a warrant.”

“While there was at least one FBI agent who participated in execution of the warrant, the person who made the decision to breach the door was a CPD officer who was named in the lawsuit and was … recommended for discipline by COPA,” Rodney said.

• The Finance Committee also put off a vote that would have designated 13 banks as municipal depositories to turn up the heat on banks to start lending to Black and Hispanic Chicagoans and businesses, invest in South Side and West Side neighborhoods and get them to attend a subject matter hearing, scheduled for Friday, on their dismal lending practices.