DuPage United Recognized at DWC Press Conference
At a press conference held on March 14, 2012, DuPage County Chairman Dan Cronin presented findings of a study commissioned by the County Board in November 2011. The study looked at daily operations, finances, and steps that have been taken since the financial debacle that culminated in the forced resignation of the entire DuPage Water Commission at the end of 2010 (that story is detailed below). In his remarks, Chairman Cronin recognized the work that DuPage United did in shining the light on mismanagement at the DWC and also thanked us for our help in getting SB 580 passed.
The study found that significant improvements have already been made under the guidance of the new DWC Chair, Jim Zay, and that additional improvements are underway. The link to the complete press release is to the right.
DWC Reform--Illinois SB 580
In late 2006 when DuPage United was fighting for restoration of the county’s Human Services Grants Fund, we eventually researched the DuPage Water Commission (DWC) in order to find out how they managed to operate in the black when other government units were struggling with shrinking budgets. Rather than a model of fiscal prudence, we discovered excesses in their budget and a huge reserve, all funded through a sales tax that we determined was no longer needed. At that time the DWC could have made a few straightforward changes in how they operated and taken one small tax burden off county residents. However, our input was received with hostility and our advice ignored, which was easy for a board of appointees to do. They were accountable to no one. We also brought this information to the local newspapers and all state and county elected officials—none were willing to act.
DuPage United continued our analysis and kept our members informed as the Water Commission committed one blunder after another in the ensuing years, ending 2009 in a deep financial hole that required $70 million in loans to bail it out. In the scramble that followed the discovery that the last $29 million of reserves had “accidentally” been spent, there was finally plenty of media coverage and many politicians chimed in as well. A very expensive outside investigation by Jenner & Block found more than enough blame to go around, including a General Manager who was knowingly hired without financial skills, an inept accountant, water rates that were kept artificially low, and poor oversight by the board.
In 2010, a bill was introduced in Springfield by Senator Dan Cronin to fold the DWC into county government where there would be more transparency and accountability, but it failed. What did pass was SB580, whose main provisions dissolved the sitting board at the end of 2010, required a new board to be appointed, and, most importantly, ended the sales tax in 2016. This bill passed in spite of opposition from most local legislators.
Much of this history can be found elsewhere in this section.
As a result of Illinois SB580, the terms of all DuPage Water Commissioners ended on Dec. 31, 2010. County Board Chair Dan Cronin appointed six new Commissioners who bring with them a skill set that includes business management, finance, and engineering. Cronin appointed a current Count Board member, Jim Zay, as DWC Chair. Mr. Zay had served on the DWC since 2009. The municipal leaders within each County Board district appointed (or reappointed) the other six Commissioners: two new ones, two who had served short terms at the old DWC, and two who had served through the era of mismanagement (Mayor Saverino and Mayor Murphy, who was also appointed Vice-Chair by the municipals). All serve without pay.
In early January, at County Chair Cronin’s request, DuPage United met with five of the new county appointees for an orientation to our organization, our DWC research, and our understanding of the history, financial missteps, and future challenges of the DWC.
January 13 was first regular meeting of the new DWC. Chairman Zay set a positive tone by saying “the past is the past” and noting there is much work to do in a short time, including hiring a new General Manager and a CFO. Zay promised openness, agendas the public can understand, contracts that will be bid each year, debt reduction, a rate study, and the elimination over time of rate subsidies provided by the sales tax (which will go away in 2016).
In keeping with a Jenner & Block recommendation, a Treasurer was appointed to serve the board. Jim Rasins is the highly respected former County Auditor of DuPage County—an excellent choice for this challenging period.
The new Commission heard some negative news as well. Due to a Moody’s downgrade of the DWC bond rating, the interest rate on an existing loan went from 2.5% to 4%, costing an additional $240,000 in interest. This is a reminder that the DWC is still in a precarious financial condition.
The new board must now work together to transform the DuPage Water Commission into a mature public utility that no longer relies on the sales tax to operate. They have the skill and experience to do this, but they will need to sustain the political will to make tough decisions going forward.
DuPage United will continue to monitor the activities of the DuPage Water Commission.