NW Ind. city's mayor floats idea of selling water to Illinois communities to generate revenue

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HAMMOND, Ind. ? A mayor in northwestern Indiana wants to turn his city into a water merchant he predicts would collect millions of dollars by selling water from Lake Michigan to communities in adjacent Illinois.

Hammond Mayor Thomas McDermott Jr. said Friday that the city is exploring the possibility of selling water to Illinois municipalities on its own or by privatizing Hammond's water company.

"It's an amazing opportunity," he said. "We would be one of the wealthiest cities in the state, if this goes through."

The Times of Munster reported (http://bit.ly/vBfzmO ) that McDermott's idea would capitalize on Chicago Mayor Rahm Emanuel's proposed water rate increases on Illinois communities that buy Lake Michigan water through Chicago.

McDermott said Hammond would be able to sell lake water to those communities at prices 20 percent lower than Chicago's prices and still earn a profit. He said the money generated would help buoy Hammond's finances and lessen its reliance on gaming money from casinos.

"This is it," McDermott said. "This is our future."

McDermott said Hammond's geographical location between Lake Michigan and the Illinois state line puts it in the perfect position to profit from water sales.

To sell water to Illinois, East Chicago and Gary would have to go through Hammond ? which the city would not allow ? or go around Hammond, he said.

But routing around Hammond would be costly, and the communities that currently buy water from Hammond would not be at liberty to allow water from Gary or East Chicago to be piped through their municipalities.

"We're the only city that can sell to Illinois," McDermott said.

He said that within Indiana, the city has to sell water at a regulated price, but there is no limit on the rate if the city wants to sell water across the state line at a higher price.

If the proposal is approved, Hammond could put the money from the water sales in a trust and use the interest generated to help pay for its $55 million in annual operating costs, McDermott said.

He said it could also permanently fund the city's college scholarship program and allow the city to slash property taxes. City officials would ensure that reasonable water rates are locked in for Hammond residents, McDermott said.

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Information from: The Times, http://www.thetimesonline.com

Source: http://www.dailyjournal.net/view/story/efa12809bda443d287c0916209e2c1e5/IN--Hammond-Water-Sales/

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