Orland Park residents and businesses will see higher water rates in 2022, with the Village Board on Monday approving an increase of 4.5%.

The rate increase represents a pass-through to account for higher costs paid by the village for Lake Michigan water, Mayor Keith Pekau said.

Orland Park has a three-tiered billing system that rewards customers who use less water.

For homes and businesses that use up to 7,000 gallons of water per month, the rate is increasing to from $7.24 to $7.57 per 1,000 gallons.

For customers using 7,000 gallons or more, up to 12,000 gallons, the rate will rise to $9.46 per 1,000 gallons from $9.05. For monthly use of 12,000 gallons up to 22,000 gallons, the rate will increase from $10.87 to $11.36 per 1,000 gallons.

Rates for water use are separate from a bimonthly service charge for maintaining water and sewer lines. The charge is now $11.43 and will increase to $11.94 in the coming year.

Orland Park and several other south and southwest suburbs receive Lake Michigan water from Oak Lawn, which in turn buys it from Chicago.

Orland Park plans to conduct a study of its water rates next year to assess costs of operations and maintenance of water and sewer lines, Pekau said Tuesday. That study will also map out what future water rate increases might be.

The village is also working to identify leaks in the water system that result in lost water that all customers end up paying for, and Orland Park is embarking on a program to replace water meters.

A project to improve the Oak Lawn Regional Water System in coming years will also add to water bills in Orland Park.

Oak Lawn’s system also provides water to Chicago Ridge, Country Club Hills, Matteson, Mokena, New Lenox, Oak Forest, Olympia Fields, Orland Hills, Palos Hills, Palos Park and Tinley Park.

The system upgrades are expected to be completed by 2025, and municipal customers are paying for the work based on a formula that includes how much water they use. Orland Park’s share is 26%, with individual water bills, once the project is complete, being assessed over a period of years for repaying debt issued to fund the water project.

The Orland Park Village Board also approved the village’s 2022 budget.

Total revenue next year is expected to be $133.6 million compared with $129.4 million for 2021. That includes sales and property tax revenue as well as what the village sees in water and sewer charges. Overall expenses are expected to be $181.5 million in 2022 compared with $170 million this year, according to the budget.

Sales tax revenue, which accounts for just under 44% of the village’s annual revenue, is expected to be $39.4 million in the coming year compared with an estimated $26.3 million in this year.

Spending in the General Fund, which accounts for most village operations including public safety, is expected to be $70.8 million in 2022 with revenues in the fund anticipated at $58.7 million. For this year, spending in the General Fund was expected to be $53.7 million with revenues of $51.5 million.

mnolan@tribpub.com