Customers of Oak Park Water Service will pay more for their drinking water if the Triunfo Sanitation District board of directors approves a proposed rate adjustment at its next meeting on Mon., April 25.

Part of the rate increase will cover a fixed charge and the rest will be based on usage.

Triunfo officials had the option to increase rates by 14 percent all at once or set up a 15 percent increase over the next three years. Board directors voted 4-1 to phase in the increase.

“It’s easier on the pocketbook of ratepayers to spread that pain over three years,” board member Mike McReynolds said.

Triunfo Sanitation District oversees Oak Park Water Service, which serves about 40 percent of the agency’s customers. In recent years the district has raised rates to pass along water cost increases to its customers, but it hasn’t raised prices in order to cover operating expenses since July 2009.

Mike Paule, chair of the Triunfo board, said Oak Park Water needs the additional revenues to function.

“This is geared towards the operation of the district, not to pay for wholesale water,” Paule said.

District consultant Raftelis Financial Consultants Inc. recommended that Triunfo keep its existing three-tiered rate structure for all customers.

“As painful as I know it is to do any rate increases, given what consumers have to deal with, in order for us to run this district and build a new tank to retire a 45-year-old tank, we have to raise rates,” Paule said.

Board member Janna Orkney said she would rather see a onetime price increase.

“The way the district is increasing fees is not fiscally conservative. We have really fallen behind in keeping up our rates with the costs, and it’s come back to haunt us,” she said.

Orkney said the delayed increase will ultimately cost water customers in Oak Park an additional 1 percent.

The construction of a $7.75-million water tank in Oak Park also contributed to the decision to raise prices.

Bank of America, which recently approved a loan for the long-awaited project, requires Triunfo to pay off the remainder of a $1.8-million debt that it carries for the 1993 purchase of the Metropolitan Water Company in Oak Park.

Triunfo bought the company in 1993 to provide potable water to Oak Park residents and has been paying about $ 800,000 per year toward the loan, due in 2013.

Officials will use Oak Park Water’s $2-million operating reserves to pay off the debt. Construction of the new tank is scheduled to begin this summer.

Since the unplanned expense will leave Oak Park Water with inadequate reserves in case of emergencies, the district will be able to borrow $1.2 million from Triunfo’s wastewater enterprise to supplement the water reserve, if necessary. It would be repaid at an interest rate of a half percent more than what Triunfo earns.

The extra 1 percent included in the three-year phase-in rate increase would cover the interest for the possible transfer of wastewater funds.

“The hope is we don’t need the money. But, if needed, the arrangement will benefit both Oak Park Water and Triunfo,” Paule said.

Before she could agree to the transfer option, Orkney said she wanted to make sure that the arrangement doesn’t impact Triunfo’s wastewater division, which has healthy reserves.

“It has to be an ‘arms length’ arrangement, making sure that it is beneficial for the wastewater side because all Triunfo ratepayers will not benefit from the loan to the potable water services since they serve only 40 percent of Triunfo customers,” Orkney said.

Keli Kaye, an Oak Park resident who regularly attends Triunfo meetings to gather information for her homeowners association, said elected officials chose a rate structure that will minimize impacts on residents.

“They’re extremely aware of the state of our economy and needs of households that bear these increases,” Kaye said. “The phase-in increase will allow the district to not have to raise money when the new tank is complete.”