Water sparks county debate

By Jonathan Jacobson

The city of Urbana, in conjunction with the University and Champaign, is considering the purchase of the local water company, Illinois American Water.

Although the majority of Illinois towns receive their water through a public facility, the Champaign-Urbana area has been using a private company for over 100 years. That company, though, has only been Illinois American Water for about five years.

Urbana’s debate about whether or not to purchase the water company came when RWE, the German parent corporation and third largest private water company in the world, decided to sell its American subsidiary, American Water Works. However, American Water Works has expressed no interest in selling Illinois American.

“It was expected that they were going to take some action,” said Barry Suits, the Network Operations Manager for Illinois American, about the council.

Eighty percent of water companies are publicly owned in America, and two-thirds are publicly owned in Illinois, said Charlie Smyth, a member of the Urbana City Council (Ward 1).

    Sign up for our newsletter!

    “There must be a reason for all that public ownership,” Smyth said.

    One of Champaign and Urbana’s main reasons for looking to acquire Illinois American is the depletion of the Mahomet aquifer.

    “We need to look at long-term water conservation needs,” Smyth said.

    The investors who fund Illinois American are so far removed that they don’t have the interest a publicly owned entity would have, he added.

    Last summer, Illinois American issued five boil orders, requesting that people boil their tap water due to contamination.

    These boil orders, according to Suits, did not affect Urbana. They did, however, affect Champaign.

    The Champaign-Urbana area is not the only upset customer. Peoria, which has been trying to acquire Illinois American’s assets in their city for a few years, recently gave up after a complex legal struggle.

    “The appraisal process was not equitable,” said Peoria City Manager Randy Oliver. The city decided not to pursue the purchase because it would require too much time and effort, Oliver said.

    Peoria’s failure has been a signal that Illinois American will not quickly give up its assets.

    Both Champaign and Urbana are supporting legislation, House Bill 4333, which would give Illinois cities the right of first refusal to purchase their sewer or water systems when they are being sold or transferred.

    Peoria, though, which was granted the right of first refusal every five years, still was unable to get across the legal barriers to such an acquisition.

    Even if the water system was purchased, there is no guarantee that, as a public asset, it would be run better or more efficiently than when it was privately owned.

    House Bill 4333 would fragment the water system and raise local rates, Suits said. But Smyth does not agree.

    “I doubt it would raise the price,” Smyth said.

    Despite all the speculation about their company, Illinois American does not want to lose its place.

    “Our desire is to continue to serve our customers and do business in Champaign-Urbana, not to spend precious time, energy and money on a divisive and costly debate about ownership of the water company,” said Terry Gloriod, president of the central region of Illinois American, in a letter to Urbana Mayor Laurel Prussing.