Annual Financial Analysis
Enterprise Funds Revenue

Enterprise Funds Revenue

The City’s enterprise funds support the operation, maintenance, and capital programs of the City’s water and sewer systems and O’Hare International Airport and Midway International Airport. These funds are self-supporting, in that each fund derives its revenues from charges and associated user fees. The costs of capital improvements for the City’s enterprise funds are included in the overall budgets of these self-supporting funds. Click here for enterprise funds expenditure detail.

O’Hare and Midway Airport Funds

O’Hare and Midway airport operations are funded through landing fees, terminal rent, and other fees paid by airlines, as well as non-airline sources, such as charges for parking and revenues from concessions in the terminals. The amount that the airlines pay each year is established at each airport on a residual basis – the airlines are charged the amount that is needed to pay for operating expenses and debt service after taking into account non-airline revenues.

In 2017, total revenues from airport operations, including concessions, rental fees, and airline rates and charges are estimated to be $1,088.1 million for O’Hare and $266.1 million for Midway.

Both the O’Hare and the Midway revenues grew steadily over the past decade. O’Hare total revenues grew at an average annual rate of approximately 5.0 percent, from $751.4 million in 2007 to $1,141.0 million in 2016, and the Midway total revenues grew at an average annual rate of approximately 2.3 percent each year, from $211.1 million in 2007 to $258.8 million in 2016. This overall growth is driven, in part, by increased landing fee rates, concession revenues and increase in rents.

Water and Sewer Funds

The City’s water and sewer funds are supported primarily through water and sewer user fees – the revenue obtained from water charges and the sewer surcharge on utility bills. The water and sewer funds are segregated funds where water fund revenue is used to support the water system and delivery of water service and sewer fund revenue is used to support the sewer system and service deliveries. These revenues also support the repair, maintenance, and improvement of the City’s water and sewer systems.

Water user fees provide approximately 95.0 percent of the revenues in the water fund with additional transfers to the water fund from other funds for work performed by the Department of Water Management and other miscellaneous resources. Nearly 100 percent of revenue in the sewer fund is from sewer surcharge paid by Chicago residents and businesses.

Beginning in 2012, the City adopted a multi-year water and sewer rate increase to fund the repair and replacement of its aging water and sewer system. Metered water rates increased by 25.0 percent from $2.01 per 1,000 gallons in 2011 to $2.51 per 1,000 gallons in 2012. Over the next three years, metered rates continued to increase each year, reaching $3.81 per 1,000 gallons in 2015. At the same time, non-metered water rates increased from $15 per 1,000 cubic feet in 2011 to $28.52 per cubic feet in 2015. In addition, sewer rates increased incrementally from 86.0 percent to 100 percent of the total water bill for Chicago residents during the same period. Additionally, an annual Consumer Price Index (CPI) increase to water and sewer rates was authorized starting June 2016 to fund the continued upgrades of the water and sewer systems. In 2016, CPI was flat so no rate increase went into effect last year. Effective June 1, 2017, rates increased by CPI or 1.83 percent. The impact of this CPI increase is approximately $0.07 per 1,000 gallons of water, making the rate per 1,000 gallons of water $3.88. Sewer charges increased by the same amount, as sewer charges are billed at 100 percent of water charges.

Details about the repairs and upgrades being completed as a part of this program can be found in the Capital Investment section.