The village of South Elgin is applying for a $7.5 million low-interest Public Water Supply Loan through the Illinois Environmental Protection Agency to help pay for improvements to the Spring Street water treatment plant.
South Elgin Village Board members were briefed by Public Works Director Mike Millette about how the funding could be used upgrade the facility and last month approved an ordinance authorizing him to apply for the loan, village spokesperson Craig Pierce said.
“Director Millette recommended we join the Illinois EPA’s bypass list to get on a waiting list if other municipalities opt-out of IEPA funding,” Pierce said. “This could happen when a community received approval for the loan but abandoned the project, or perhaps a community ran into other obstacles that deferred a project’s start.”
The treatment plant is part of South Elgin’s water quality improvement plan, which includes the recently completed construction of a new water tower at Kingsport Drive and Ione Drive. The tower cost $5.4 million — 8% of which was covered by American Rescue Plan Act funds and the rest from budgeted savings — and went online in fall 2025, Pierce said.
The old tower at McLean Boulevard and Spring Street has been demolished and the scrap is being removed in advance of plans to drill a deep well at the site, he said. The estimated drilling start date is this June.
Significant upgrades to the existing water treatment facility are needed to accommodate the well, including a complete overhaul of its electrical system, stronger pumps and other functionality upgrades to a 34-year-old facility.
According to a village memo, “the water in the deep aquifer requires radium removal (as opposed to barium removal for the current well 7 aquifer), and more electrical supply is required for the deeper well, necessitating a rehabilitation of the treatment plant.”
Plans for the project were developed by Engineering Enterprises and submitted to the Illinois Environmental Protection Agency for consideration for the Public Water Supply Loan Program in 2025. While South Elgin did not score well enough to receive the loan, the village was only a few places away from securing the money, the memo said.
“By getting on the IEPA waitlist, if a significant portion of the funds become available, the village could use their loan program and repay the proceeds at below market interest rates over 20 years,” Pierce said. ”If necessary, the village would seek bonds or loans at market rate and pay more interest over time.”
According to a village memo, the loan’s annual interest rate right now is 1.87% for 20 years, requiring an annual payment of $449,000 based upon a principal of $7.5 million.
South Elgin must also pledge to raise rates to match the debt service, according to the memo. Recently adopted water rate increases should cover the requirement.
New water rates went into effect this January. The base monthly rate for residents went from $40.66 to $45.54, with an additional $3.66 per 1,000 gallons charged when usage exceeds 2,000 gallons per month and $5.76 per 1,000 gallons for usage beyond 8,000 gallons per month, Pierce said.
Because South Elgin does not have home rule taxing authority, objections to the loan request can be filed through March 11. The loan application deadline is March 31.
Mike Danahey is a freelance reporter for The Courier-News.
https://www.chicagotribune.com/2026/03/03/elgin-water-plant-loan-well-improvements/
