Water system improvements may be on horizon for McHenry Shores residents

McHENRY – McHenry Shores residents could see their water rates go up if the state approves the pending sale of their water system.

The McHenry Shores Water Company has been plagued by financially instability, consistently running a deficit and failing to pay its property taxes for several years, and in June 2011, its owner, T.P. Mathews, and his wife, Lois Mathews, filed for bankruptcy, according to documents submitted to the Illinois Commerce Commission.

Aqua Illinois – a water utility with 56,000 customers in Illinois, including in Cook, Kane, Lake and Boone counties – agreed to buy McHenry Shores Water Company's assets for $427,000 plus closing costs.

None of the other private utilities in the area placed a bid for the company, and the city of McHenry offered $75,000, according to court documents.

The terms of the sale were approved by the bankruptcy court in October 2013 over the objections of Mathews who argued that the McHenry Shores Water Company isn't a part of their bankruptcy estate and that the price was too low.

The Illinois Commerce Commission is responsible for approving the terms of the sale and has also been asked to approve a rate increase to, in part, fund improvements to the water system, including water main replacements, water meter replacement and other maintenance and repairs.

The process could take 11 months, but spokeswoman Beth Bosch said she doesn't expect it to last that long, perhaps wrapping up by May or June.

Typically, a water company goes through a separate rate case analysis in asking for a rate increase, Illinois Commerce Commission rate analyst Christopher Boggs said in his prepared testimony.

But because of the McHenry Shores Water Company's unstable financial position, Boggs recommended approving the increase.

The McHenry Shores Water Company also has a history of violations and is on the Illinois Environmental Protection Agency's critical review list.

"I make this recommendation because the need for McHenry Shores to be acquired by a capable utility appears to be dire and immediate," he said.

Residents are currently charged a $6 monthly base rate plus $1.93 per 1,000 gallons of usage, according to Illinois Commerce Commission staff testimony.

Aqua Illinois is asking to apply the rates it charges its other customers to the McHenry Shores area, which would up the bill for 4,500 gallons of water use to $44.30 from $14.70, according to the documents.

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