SB1444 104TH GENERAL ASSEMBLY

LRB104 08135 SPS 18181 b

104TH GENERAL ASSEMBLY
State of Illinois
2025 and 2026
SB1444

Introduced 1/31/2025, by Sen. Michael E. Hastings

SYNOPSIS AS INTRODUCED:

New Act

Creates the Chicago Water Contracts Transparency Study Act. Provides that the Commission on Government Forecasting and Accountability shall commission an independent study on the City of Chicago's water contracts with distributing municipalities, including detailed information on the agreements and costs associated with those agreements. Provides that the study shall also assess the potential cost impacts of establishing an alternative stream of water distribution, such as through the creation of a Southwest Water Authority or similar entity. Provides that the Commission shall hold at least 2 public hearings to solicit input from municipal representatives, water industry experts, and other stakeholders and include any relevant information resulting from those hearings in the study. Provides that the Commission shall complete the study and submit a report that includes an executive summary, detailed findings, and any recommendations resulting from the study to the General Assembly and the Governor no later than one year after the effective date of the Act. Effective immediately.

A BILL FOR

AN ACT concerning State government.

Be it enacted by the People of the State of Illinois, represented in the General Assembly:

Section 1. Short title. This Act may be cited as the Chicago Water Contracts Transparency Study Act.

Section 5. Purpose. The purpose of this Act is to direct the Commission on Government Forecasting and Accountability to commission a comprehensive study on the City of Chicago's water contracts with distributing municipalities. This study shall include detailed information on the agreements, charges, past infrastructure costs, future infrastructure costs, and fee increases and shall provide transparency concerning water distribution agreements within this State. The study shall also assess the potential cost impacts of establishing an alternative stream of water distribution, such as through the creation of a Southwest Water Authority or similar entity.

Section 10. Study commissioned.

(a) The Commission on Government Forecasting and Accountability shall commission an independent study to:

(1) identify and catalog all existing water contracts the City of Chicago has with municipalities that distribute water from the City of Chicago's water supply;

(2) articulate the amount of money charged by the City of Chicago for the provision of water to these distributing municipalities, including an analysis of any pass-through contracts or agreements these municipalities may have with other municipalities;

(3) analyze historical trends in the charges and fee increases associated with these water contracts, including but not limited to:

(A) the percentage increases in charges over the previous 10 years;

(B) the specific reasons for any fee increases; and

(C) an overview of how those increases have impacted municipal budgets and water customers;

(4) review past infrastructure costs related to water treatment and distribution to these municipalities and estimate future infrastructure costs needed to maintain or improve water delivery systems, including projected costs for upgrades, maintenance, and necessary capital improvements;

(5) provide recommendations for improving transparency, accountability, and equitable pricing in the future water contracts between the City of Chicago and distributing municipalities; and

(6) assess the potential cost impacts and benefits of establishing an alternative stream of water distribution to the distributing municipalities, such as through the creation of a Southwest Water Authority or similar entity.

(b) The study shall include a detailed examination of the following:

(1) Infrastructure and capital investment. The study shall evaluate the initial capital investment required to develop and construct an alternative water distribution system, including the construction of treatment plants, pipelines, reservoirs, and any necessary infrastructure to support water delivery. The study shall also consider the timeline for such development and the long-term maintenance and operational needs.

(2) Operational and maintenance costs. The study shall analyze the annual operating costs associated with the establishment and ongoing management of a new water distribution entity, including staffing, energy, maintenance, and administrative overhead. The study shall also compare these costs to the current expenditures related to water distribution through the City of Chicago, including any hidden or indirect costs borne by municipalities.

(3) Impact on existing contracts. The study shall examine how the introduction of a new water distribution authority might affect the terms and financial obligations of current water contracts between the City of Chicago and municipalities. The study shall specifically assess whether municipalities could potentially reduce reliance on the City of Chicago for water, renegotiate existing contracts, or seek alternative supply sources, and how this would affect the pricing structure and stability of the current system.

(4) Cost to municipalities and ratepayers. The study shall project the potential cost impact on municipalities and their residents if an alternative water distribution system were implemented. The study shall also include short-term and long-term price projections for water rates, including any potential savings or increased costs to municipalities and their customers and the financial feasibility of transitioning to such a system.

(5) Environmental and regulatory considerations. The study shall assess any environmental impacts associated with building a new water distribution system, including water sourcing, treatment processes, and the sustainability of the proposed alternative water supply. The study shall include any considerations of compliance with State and federal regulations and any potential environmental challenges, such as water quality or access issues.

(6) Market competition and reliability. The study shall analyze how the establishment of a Southwest Water Authority or similar entity could introduce competition into the water market, potentially benefiting municipalities by offering more competitive pricing and reliable service options. The study shall also assess whether the introduction of competition could lead to innovation, greater efficiency, or better service quality.

(7) Feasibility study of water sources. The study shall evaluate alternative water sources available to the proposed new authority, including the feasibility of obtaining water from new sources, such as rivers, lakes, or groundwater, that could be used to supply the new water distribution entity. The study shall also consider the potential risks and benefits of these sources compared to the current reliance on the City of Chicago's water supply.

(8) Regional and statewide implications. The study shall analyze the broader impact of establishing an alternative water distribution system on regional and statewide water management strategies. The study shall also assess how the creation of an alternative authority would influence overall water resource planning, coordination among municipalities, and alignment with State water management goals.

(9) Potential for public-private partnerships. The study shall explore the possibility of engaging public-private partnerships to fund, build, and operate the new water distribution system. The study shall also evaluate the potential advantages and risks associated with such partnerships, including the potential for greater efficiency, cost-sharing, and infrastructure investment.

(10) Municipal wells and local infrastructure. The study shall examine the following:

(A) State of infrastructure. The study shall assess the condition of municipal wells used by municipalities that do not solely rely on the City of Chicago for water supply. The study shall include an evaluation of existing well infrastructure, such as pump systems, pipelines, storage tanks, treatment facilities, maintenance needs, and associated costs for repairs or upgrades.

(B) Wells expiring and costs of replacement. The study shall catalog the expiration or decommissioning dates of wells in municipalities using wells as a primary or supplementary water source, including the age of the wells, expected lifespans, and projected decommissioning timelines. The study shall also evaluate the costs associated with replacing or upgrading these wells, including drilling new wells, expanding storage capacity, and upgrading treatment systems to meet modern standards and regulatory requirements.

(C) Costs of infrastructure improvements. The study shall examine the costs of necessary infrastructure improvements in municipalities with aging or inadequate water infrastructure, including system-wide assessments, repairs, expansions, or full replacements. The study shall project the funding required to bring the infrastructure up to code, maintain system reliability, and ensure the sustainability of local water supplies.

(D) Impacts of wells on overall water cost. The study shall consider the financial impacts on municipalities' water costs, including any savings or increases that could result from relying on well water versus purchasing water from the City of Chicago or an alternative distribution authority. The study shall include energy costs, maintenance of infrastructure, and the long-term sustainability of groundwater resources in making this consideration.

Section 15. Public hearings. The Commission on Government Forecasting and Accountability shall hold at least 2 public hearings to solicit input from municipal representatives, water industry experts, and other stakeholders and include any relevant information resulting from those hearings in the study.

Section 20. Reporting requirements. The Commission on Government Forecasting and Accountability shall complete the study and submit a report that includes an executive summary, detailed findings, and any recommendations resulting from the study to the General Assembly and the Governor no later than one year after the effective date of this Act.

Section 99. Effective date. This Act takes effect upon becoming law.