The Ottumwa Courier

Ottumwa

March 12, 2013

Water Works rate increases approaching

Rural water sees no increase, but weather-related leaks continue to cause spikes in customers’ bills

OTTUMWA — Residents in Ottumwa limits can expect a slight uptick in their water bills this summer.

Ottumwa Water Works and Hydro general manager Mike Heffernan said Ottumwans will see a 4.5 percent increase on July 1 on both the base and usage charge.

Currently, customers pay a base charge of $9.22 per month and a usage charge of $2.66 per billing unit (748 gallons). The average customer uses five billing units, Heffernan said, which amounts to around $22 per month. After the increase this summer, their bill will increase $1.01.

“I think it’s safe to assume there will be some sort of rate increase [next year],” Heffernan said. “We’re trying to keep up with maintenance issues. Our plant is over 50 years old, so maintenance is an ongoing problem. We’re trying to keep up with water main breaks; we’re trying to replace water mains.”

The biggest issue is how to rehabilitate the hydro-electric dam, which is also more than 50 years old.

“We started the process a couple years ago and repaired Gate 8, which is the southwest gate by The Beach Ottumwa,” he said. “That process cost over $800,000, on just one gate.”

The project didn’t go as planned either, he said, so he and the board are taking a step back and re-evaluating what they’re going to do.

“One way or another it’s going to cost a lot of money to either rehabilitate the dam or come up with another plan to pool our water,” he said.

One possibility is removing most of the mechanical gates and building a stationary structure 10 feet lower than the current river level. The piers in the gates would stay since they anchor everything into the bedrock, he said.

“I think it’s going to cost too much to rehabilitate the whole dam and gates the way it is now,” he said. “It will cost in the tens of millions of dollars by the time we’re done, and we need to figure out a way to pay for that.”

Wapello Rural Water Association manager Lee Asher said the association’s last rate adjustment was in 2010, when the cost per 1,000 gallons increased $1 from $4.60 to $5.60.

“That’s a penny per 100 gallons,” Asher said. “That dollar is less than what you’d pay for a small bottle of water at a Casey’s store.”

Rural water is required to take monthly, and in some cases daily, samples for the Iowa Department of Natural Resources, the cost of which increased $25,000 this year.

“People ought to stop and think about what they’re paying a month for their cell phone bill, for dish, for Internet service,” he said. “I’ve got one of these darn smart phones and I’m paying almost $50 a month for it. I can live without my cell phone ... I can’t live without safe water.”

Rural water provides water services to more than 6,000 customers in Wapello, Jefferson, Keokuk, Davis and Washington counties. The majority of rural water customers are in the lower bracket of cost per 1,000 gallons, he said.

“The more they use, the rates change,” he said. “They go up, then start dropping off when they get into higher usage. We’re not for profit and we have to provide a balanced budget, so we have to do what we have to do to ensure our customers get the water by us paying our bills.”

The first 1,000 gallons costs a customer the aforementioned $5.60 per month. After the first 2,000 gallons, the next 4,000 gallons is $10.35 per 1,000 gallons, then the next 14,000 gallons is $7.40  per 1,000 gallons and anything more than 20,000 gallons is $3.70 per 1,000 gallons.

Only the first bracket increased in 2010. The price for the next bracket went down 75 cents and the rest didn’t change.

“We’re only changing if we have to,” he said.

Everything costs more: the electricity to pump the water, the lime used to treat the water and the gas they burn to serve the customers.

“We’re pretty pleased with the fact that all we had to raise it in two years was $1,” he said.

There is also a facility charge in each rural water customer’s bill.

“You pay a minimum fee to have [the service] there, then we charge for usage above that,” he said.

When the rural water system was built, the association had to borrow millions of dollars to build it. Everybody that signed up for water service agreed to pay a part of the fixed cost. The facility fee has remain unchanged over the years, he said.

Those customers connected to the original system pay a base facility fee of $24.60 per month, whereas those connected to the expanded system pay $31.05 per month.

Rural water serves approximately two houses per mile of water main, he said, compared to in-town, where there can be around 80 houses per mile.

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