Niles Sues Glenview Over $700K in Unpaid Water Bills

The Village of Niles filed a lawsuit against the Village of Glenview this Wednesday seeking $698,000 that Niles officials say its neighbor to the north owes in water bills.

The amount represents payment for water used by 44,000 customers of North Maine Utilities—which is owned by Glenview—in April and May.

The customers, who live in unincorporated areas, will continue to receive water while the two villages resolve their conflict, according to a statement released by the Village of Niles. In addition to homes, the utility serves hospitals, fire departments and businesses.

In its lawsuit, Niles claims that Glenview has breached the terms of a 30-year agreement on the provision of water to North Maine customers, and is asking for an injunction forcing Glenview to make its payments. Without such an injunction, the suit says, Niles will face irreparable financial harm. The village spends about $150,000 a month to purchase water from Chicago for the North Maine customers and receives about $350,000 a month in payment for the water from Glenview.

According to the statement from Niles, Glenview has told Niles officials that it will not make any more payments until it can audit billing records for the last 14 years.

In a statement released Wednesday evening, Glenview officials said they could not comment on the lawsuit directly because they had not yet had a chance to review it. Calls and emails to the Glenview special projects director and deputy manager were not returned Thursday; the village hall was closed because of a power outage caused by .

More than two decades in the making

The water agreement started in 1990 as a way to get Lake Michigan water from the City of Chicago to residents in unincorporated areas near Glenview. Niles agreed to build and maintain facilities to transport water from Chicago to what was then known as the North Suburban Public Utility Company. The utility company agreed to purchase all of its water from Niles and Niles absorbed the $3.4 million cost of the facilities including a 5-million-gallon reservoir, pumping facilities, a metering station and equipment.

In 1997, Glenview purchased the utility company, whose name was later changed to North Maine Utility Company.

Until recently, the Village of Glenview had been paying the water bills regularly since that time, explained Niles Village Manager George Van Geem.

“There was never a disputed invoice in 14 years,” Van Geem said. “The agreement was simple: we give them the water and they give us the money for it.”

The original 30-year agreement is supposed to run through 2020.

Glenview postpones payment, requests audit

According to the statement, Niles learned of Glenview’s refusal to pay for the water in a May 23 letter from Glenview Village Manager Todd Hileman to Niles Mayor Robert Callero. Hileman wrote that he had reason to believe that Niles had been improperly overcharging North Maine by including the village’s sewer rates in the water charges. According to Niles officials, Hileman demanded an audit of all Niles invoices for 14 years and served Niles with a Freedom of Information Act request seeking further detailed information on Niles water billings.

Van Geem said that’s impossible because Niles does not make any separate charges for sewer service, even to its residents.

Niles also said that the agreement stipulates that if there is a dispute over the bill, Glenview should pay the undisputed portion and put the disputed portion in an escrow account that bears interest while the matter is settled.

"Glenview did withhold two months of water payments -- and have put them in escrow -- for the North Maine Utility system based on preliminary information
that Niles has been overcharging Glenview," Village Communications Director Lynne Stiefel told Patch in an e-mail Thursday morning. "Glenview has scheduled an audit of Niles records in early July to verify information related to the methodology of Niles' water charges."

But Van Geem countered that the agreement calls for Niles to choose the agent holding the escrow account, and Glenview did not ask Niles to do that.

“I don’t know where that money is,” he said.

He also said that Glenview should be making money on the deal. While Niles charges Glenview $5.05 per thousand gallons of water, Glenview charges North Maine customers $9.30 per thousand gallons – an amount Van Geem said he found on the village’s website. Even with the profit, Glenview approached Niles in February about reducing the rate Niles currently charges in exchange for some future consideration, which was never specified, Van Geem said. Glenview's request was not honored and there was no changed made to the contract. 

The Niles village board authorized the lawsuit at a special board meeting June 14, he said.

Stay tuned to Patch for updates.