Charges for Services – Eliminate Subsidized Water and Sewer Usage for Non-profit Organizations
| Revenue: $15.2 million |
Under the City’s Municipal Code, the City has the option to not charge water usage fees to properties that are owned by non-profit, religious, and educational institutions.[1] Additionally, the City can choose to not charge these same institutions for the first $1,000 of fees for use of the sewer system.[2] The basic requirement that a property must meet in order to qualify to avoid these fee reductions is that “such property as is owned and used in the immediate conduct of carrying out the purpose of any charitable, religious or educational institution.”[3]
In 2009, the City waived $12.55 million in water usage fees and $2.68 million in sewer usage fees to these institutions. The table below shows the 25 largest accounts in terms of the size of the subsidy.
Under this option, the City would rescind this benefit and, assuming the value of the subsidy is the same today as it was in 2009, raise an additional $15.2 million annually.
| Proponents might argue that a large portion of these benefits goes to the City’s largest cultural and educational institutions, such as the City’s museums and universities. These institutions often have large endowments and receive a number of other City benefits, such as property tax exemptions, and thus do not need this benefit. Additionally, from an environmental standpoint, by not charging these institutions for water and sewer usage they are not incentivized to conserve their water and sewer usage. | Opponents might argue that these institutions perform important public services that provide significant value to society and waiving these fees enables them to spend money on programs and services for City residents. They would point out that three of the four largest subsidies go to institutions that provide medical or rehabilitative services and if the City were to impose these fees, these institutions may have to cut back on some of the services they provide or raise their fees.
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Discussion and Additional Questions
There are several options short of eliminating the entire subsidy. For example, the City could target the subsidy to smaller organizations based on annual revenues, or it could target subsidies based on the type of service the institution provides.
Budget Details
| Fund: Water and Sewer Fund, 0200 and 0314 | Type of Revenue: Water and Sewer Rates |
| The appropriation is located on pages 19 and 20 of the 2011 Annual Appropriation Ordinance.
http://www.cityofchicago.org/content/dam/city/depts/obm/supp_info/2011BudgetOrdinance.pdf |
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25 Largest Water and Sewer Subsidies by Account
|
Customer Name |
Address |
Water Fee Reduction |
Sewer Fee Reduction |
Total Reduction |
| Misericordia Home | 6300 N Ridge Ave |
$289,167 |
$1,500 |
$290,667 |
| Heart Of Mercy Village | 1955 W Devon Ave |
$211,529 |
$1,500 |
$213,029 |
| University Of Chicago Henry Crown Field House C02 | 1100 34 E 56th St |
$182,654 |
$1,000 |
$183,654 |
| Children’s Memorial Hospital | 707 W Fullerton Pkwy |
$165,322 |
$1,000 |
$166,322 |
| University Of Chicago South Steam Plant F02 | 6051 S Blackstone Ave |
$127,765 |
$1,000 |
$128,765 |
| Northwestern Memorial Hospital | 221 E Huron St |
$107,646 |
$1,000 |
$108,646 |
| Holy Name Cath School | 751 N State St |
$91,866 |
$1,000 |
$92,866 |
| Mercy Hospital | 2520 S Prairie Ave |
$86,290 |
$1,000 |
$87,290 |
| Columbia College Chicago | 606 S Michigan Ave |
$80,702 |
$1,000 |
$81,702 |
| Rush Presbyterian St Luke’s Medical Center | 1750 W Harrison St |
$79,110 |
$1,000 |
$80,110 |
| Northwestern Memorial Hospital | 221 E Huron St |
$78,124 |
$1,000 |
$79,124 |
| University of Chicago Power Plant | 6061 S Blackstone Ave |
$75,205 |
$1,000 |
$76,205 |
| Rush Presbyterian St Luke’s Medical Center | 1750 W Harrison St |
$72,220 |
$1,000 |
$73,220 |
| Northwestern Hospital #100 | 245 E Chicago Ave |
$71,391 |
$1,000 |
$72,391 |
| Holy Cross Hospital | 2716 20 W Lithuanian Plaza Ct |
$68,256 |
$1,000 |
$69,256 |
| The Art Institute of Chicago | 201 S Michigan Ave |
$65,763 |
$500 |
$66,263 |
| University of Chicago Hospital | 950 E 59th St |
$64,435 |
$1,000 |
$65,435 |
| St Mary Of Nazareth | 1120 N Leavitt St |
$63,922 |
$1,000 |
$64,922 |
| Illinois Masonic Hospital | 834 W Wellington Ave |
$61,858 |
$1,000 |
$62,858 |
| Mount Sinai Hospital | 2759 W 15th St |
$59,254 |
$1,000 |
$60,254 |
| Moody Bible Institute | 820 N LaSalle Dr |
$58,912 |
$1,000 |
$59,912 |
| Rush Presbyterian St Luke’s Medical Center | 1650 W Harrison St |
$58,106 |
$1,000 |
$59,106 |
| St Joseph Hospital | 2934 N Lake Shore Dr |
$56,306 |
$1,000 |
$57,306 |
| University of Chicago Admin Building D20 | 5801 S Ellis Ave |
$56,137 |
$500 |
$56,637 |
| Illinois Institute of Technology Research | 3424 S Dearborn St |
$55,256 |
$1,000 |
$56,256 |
|
Total |
$2,387,196 |
$25,000 |
$2,412,196 |
|
| Source: Department of Water Management | ||||