News Feature | March 10, 2014

Iowa Utilities To Merge For Cost Savings?

By Sara Jerome
@sarmje

iowareg

Iowa water utilities are examining whether teamwork could help them lower their costs.

"Twenty-one central Iowa cities and public water suppliers will study whether they can provide better service and accommodate future demand for water by combining their water treatment operations," the DesMoines Register reported

The investigation is not cheap. The study comes with a $250,000 price tag. It "could show whether merging the area’s water utilities, most of which already receive at least a portion of their water from Des Moines Water Works, could result in lower rate increases," the report said, citing local water officials.

Why all this effort? To keep water bills reasonable, according to E.J. Giovannetti, "a former Urbandale mayor and Polk County supervisor who is on the Central Iowa Regional Drinking Water Commission, which is spearheading the study."

“The biggest issue is to assure we have water and to assure it is being produced at a reasonable cost,” Giovannetti said in the report.

Combining water utilities to save costs has been attempted in various other parts of the country.

"Our nation's water utilities face an enormous need for more revenues thanks to aging infrastructure, and shifting labor supply. All the signs point toward increased rates. However, the average water/sewer bill is already [unaffordable] for at least 23 million households. Consolidating services is one approach with the potential for huge gains for some communities," Jason Mumm, Director of Financial, Commercial, and Risk Services at MWH Global, said in a report on water utility regionalization. 

The Texas government examined regionalization of wastewater and water utilities as well, as issued a policy statement on it.  

"This document states the TCEQ’s policy for evaluating applications for new systems to determine whether regionalization—the consolidation of the operations, physical systems, or both of two or more existing or proposed water or domestic wastewater systems—is a viable option for the proposed new system. The goal of this policy is to achieve the best service to the consumer at rates that will ensure that the system is maintained for the long term," the report said.

Image credit: "Iowa River, Running Near Iowa Street, in Iowa City located Iowa State, any questions?," © 2008 rachaelvoorhees, used under an Attribution-ShareAlike 2.0 Generic license: http://creativecommons.org/licenses/by-sa/2.0/deed.en

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