Central Iowa Water Works: What it is and what it means for Polk City residents.
POLK CITY WATER HISTORY BACKGROUND: Polk City has been purchasing water from Des Moines Water Works (DMWW) since 2003. Polk City can produce some of our own water, and we are currently producing about 40% of the water we sell to our residents and purchasing the other 60% of water from DMWW. Unfortunately, as Polk City’s demand for water continues to increase, the percentage that the city can produce continues to decrease. The city produces water at a lower cost compared to what we purchase water for with DMWW. The 40% & 60% ratio was consistent up until a few years ago. In the past few years, the city has had a number of events, where our ability to produce water was either lower, or unavailable, and we have had to fully rely on purchasing water from DMWW.
Polk City purchases water from DMWW, and DMWW is solely responsible for setting rates for the water they sell to their customers. As a purchaser, Polk City has no say on the cost of purchasing water. DMWW has several different customer classes, and charges for the sale of water:
1. Des Moines Inside the City
2. Wholesale Purchased Capacity
3. Wholesale with Storage
The cost per 1,000 gallons is cheapest for Des Moines customers, and most expensive for wholesale with storage customers. When we began purchasing water from DMWW in 2003, we had 350,000 gallons of capacity. In 2018, Polk City purchased additional capacity, as it became available from the Berwick Water Association. Polk City was successful in purchasing capacity in the amount of 250,000 more gallons per day, with a total of 600,000 gallons in purchased capacity. As part of the charges for water from DMWW, when we exceed 600,000 gallons, we pay a higher rate per 1,000 gallons the following calendar year. That rate is dependent on the city’s highest peak date of water consumption from DMWW. Since 2018, the City has exceeded our purchase capacity in 5 of the 6 years since obtaining the additional capacity. The City has been looking at all means to either produce more of our own water, or purchase more capacity from DMWW, however, we have not come to a good resolution.
CENTRAL IOWA WATER WORKS BACKGROUND: For the past few years, DMWW, and the participating metro cities, have been discussing regionalizing the water utility, instead of all the metro cities buying water from DMWW. A comparable model would be the Wastewater Reclamation Authority, which is the entity for most cities in the Des Moines metro, including Polk City, to have their sanitary sewage treated at. Providing adequate water supply to the Des Moines metropolitan has been an issue for all growing cities in the region for several years. Pursuing a better arrangement and model has been a priority for 12 participating communities.
As these discussions have been taking place over the past several years, there have been multiple versions of a 28E Agreement, establishing CIWW. There were 14 participating communities in the first agreement, and Altoona and Bondurant have withdrawn as founding communities/entities, leaving 12 entities: Ankeny, Clive, DMWW, Grimes, Johnston, Norwalk, Polk City, Urbandale Water utility, Warren Water, Waukee, Xenia Water, and West Des Moines Water Works.
This model helps to address 2 major issues most cities have with purchasing water, which include having adequate capacity and having some voting authority. The more appealing is getting more purchase capacity for Polk City. As the latest version is written, Polk City would receive 1.681 million gallons of purchase capacity, which would set us up well for future growth. Polk City uses about 1.2 million gallons of water on peak days in the summer months.
Discussing this topic has been ongoing for years, and the City Council has taken multiple steps towards joining CIWW. In early 2023, the City engaged PFM to review the financial impacts of joining, and the cost of the proposal compared to attempting to producing more of our own water. I have asked PFM to attend Monday’s work session to review the most updated financial information in the 28E agreement. That information will also be made available to the public prior to Monday’s meeting.
As part of the regionalization of drinking water under CIWW, CIWW would take ownership of all water producing facilities, including Polk City’s Water Treatment facility and wells. The City Council will hold a Public Hearing on December 11th at 6pm. This hearing is one additional step involved with CIWW. The public hearing will be specific to the transfer of the city’s assets, and we encourage the public to participate and provide comments. The CIWW 28E agreement is available here 28E/28F Agreement
FINANCIAL CONSIDERATIONS: Polk City’s one-time initial capital contribution of $19,640, plus our net position of ($1,640,914). The net position is an estimate, and may change, but as the final agreement is current, these are the city’s financial considerations. Review PFM Financial Overview here Observations and Considerations for Regional Water and Schedule XIII Asset Transfer Terms here.
Resident's should not notice this change as they will still contact City Hall for questions or to pay their utilities bills.