Who will oversee Des Moines metro water supply? What's in regional plan - Des Moines Register

Who will oversee Des Moines metro water supply? What's in regional plan

Who will make decisions about central Iowa's future water supply? Here's what to know.
Addison Lathers

Des Moines Water Works, Urbandale Water Utility and West Des Moines Water Works have released the third and final draft of an agreement that would form Central Iowa Water Works.

Here's what's to know about the agreement that, if approved, would result in a unified system providing drinking water to about 600,000 residents.

What is Central Iowa Water Works?

CIWW would be a new regional water authority, purchasing water produced by Des Moines Water Works and utilities in other member communities, then selling it back to its members at an exclusive wholesale rate for distribution to their customers. Each community would supply the water it purchases to its individual customers, setting its own water rates; operating and maintaining local water mains and water towers; and providing customer service.

The system would take ownership of facilities currently held by its members and maintain and expand them, as needed.

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Initially, it would not necessarily serve more residents than the existing Des Moines Water Works, which already sells water to almost all of the communities involved. But it would bring those communities together in a consortium to plan and manage water supply and quality for the region as metro Des Moines, the fastest-growing major urban area in the Midwest, continues to expand.

Des Moines, West Des Moines and Urbandale began efforts in 2020 to make the long-discussed merger a reality. Other potential members that have expressed interest in joining are Ankeny, Clive, Grimes, Johnston, Norwalk, Polk City, Warren Water District, Waukee and Xenia Rural Water District.

All except Grimes currently purchase water from Des Moines Water Works.

The system would be governed by a board

CIWW would be a public body that is distinct from its member agencies, subject to open meetings and public records requirements under Iowa law. It would be governed by an unpaid board of trustees appointed by member communities.

The initial board would consist of 14 trustees, with at least one representing each of the member agencies. Any member that serves a population of 100,000 or more would be entitled to an additional representative, meaning that Des Moines Water Works would be entitled to appoint two trustees.

In addition, voting on a number of key matters, such as bonding, hiring or firing a director, adopting budgets and long-range plans and admitting new members, could be weighted at the request of trustees representing two or more member agencies. The weighting would be determined via a formula taking into account a member community's average annual water demand.

Member agencies would have to buy in

The founding members would make an initial capital contribution to CIWW as determined by the board, based on their water needs. The sums would be paid in cash and would be nonrefundable. CIWW is expected to begin with nearly $2 million in contributions.

Local entities that don't join would still be able to purchase wholesale water from CIWW. Des Moines Water Works spokesperson Melissa Walker said communities such as Altoona and Bondurant, which already have opted not to join, would be able to continue as customers under a 2005 wholesale water service master agreement until it expires in 2045.

They also would have the ability to join the system at a later date at the board's discretion. Communities that buy in after the system is formed would still have to make an initial payment.

Initial capital contributions for each founding member would be:

- Ankeny ― $220,900.
- Clive ― $67,660.
- Des Moines Water Works ― $855,680.
- Johnston ― $79,120.
- Grimes ― $59,700.
- Norwalk ― $37,020.
- Polk City ― $19,640.
- Urbandale Water Utility ― $164,520.
- Warren Water District ― $61,820.
- Waukee ― $70,400.
- West Des Moines Water Works ― $272,720.
- Xenia Rural Water District ― $70,600.

Who is producing water and what would it cost?

Des Moines Water Works, West Des Moines Water Works, Grimes and Polk City would transfer their existing water supply facilities to CIWW ownership.

While members would be able to set the rates they charge to their customers, the CIWW board would establish wholesale rates — what it charges members — for water production based on expenses and costs incurred as it repairs and expands facilities.

The board would establish rates before CIWW's first day in operation, and would adjust them annually.

How are water producers being reimbursed?

In exchange for their facilities and longstanding investment, founding agencies will be reimbursed based on the value of their reserve capacities, or excess water they produce but don't use. Communities joining CIWW that require more water than they bring to the table would foot the bill.

Clive and Des Moines Water Works would be owed $142,509 and $67,871,223, respectively. Every other agency faces a cost:

- Ankeny ― $15,671,998
- Johnston ― $10,605,963
- Grimes ― $4,100,720
- Norwalk ― $5,383,669
- Polk City ― $1,511,625
- Urbandale Water Utility ― $8,820,895
- Warren Water District ― $3,309,210
- Waukee ― $8,087,942
- WDMWW ― $282,444
- Xenia ― $7,369,072

The amount owed by each community is meant to be paid in a lump sum within 12 months of CIWW's operational start date.

CIWW would pay for repairs, improvements to water supply facilities

The cost of repairing, updating and improving water supply facilities would be shouldered by CIWW, the only exception being the Saylorville Water Treatment Plant, which Des Moines Water Works would continue to oversee initially.

After a $159 million expansion underway at that plant is complete, Des Moines Water Works would transfer the property to CIWW, and the system would assume any outstanding debt the utility has incurred for the project.

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Each water-producing member would be expected to expand the capacity of its water supply facilities when directed by the CIWW board, provided that CIWW is willing to pay for the full cost of the project. Members would not be allowed to expand the capacity of their facilities without permission from the board.

CIWW would pay its water-producing members for the operation of their water supply facilities in monthly installments. The amount would be equal to the cost of providing services to the members plus an additional 2%.

A key function of the board would be to prepare and adopt a long-range plan to meet the needs of the member communities for at least 10 years, revising it as needed. Factors in the plan would include expected growth in water requirements; water availability and quality; long-range trends affecting water supplies and allocations, includingclimate change; water treatment capacity; and anything else needed to assure the safety and sufficiency of drinking water supplies at, the draft proposal notes, "reasonable cost."

CIWW plans to open for business Jan. 1, 2025, for a period of 40 years

CIWW plans to start up as a wholesale supplier on or after Jan. 1, 2025, when ownership of all of the water supply facilities of its members would officially transfer to the system. The initial total water production capacity of CIWW would be 134.5 million gallons per day.

The agreement that binds CIWW would be in effect for 40 years.

The system could sue, acquire land and take on debt

CIWW would have the authority to plan for, acquire and construct water supply facilities as it deems necessary, as well as operate facilities for the benefit of its members. The system would be able to sue and be sued, enter into contracts and issue bonds and other debt.

CIWW couldn't sell water to nonpublic water supply systems

While it would be able sell water to nonmember communities, the system would be barred from distributing water to any entity that is not a public water supply system. It also would not be able to directly sell water to customers within the jurisdiction of its member agencies.Providing free water to any private or public agency also would be out of the question.

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CIWW wouldn't have a preference for any of its members or discriminate in service, restrict any member from serving a specific retail customer or enter into any other business other than provision of water, under the draft agreement. Additionally, no member of CIWW would ever be liable for any debts the system takes on.

Does everyone endorse the idea of CIWW?

No. Bondurant and Altoona already have decided to go their own way. While they may continue buying water from CIWW, as they currently do, they also plan to build or expand their own water production capacity, believing it will be cheaper for their residents. Other communities and agencies will need to make their own decisions.

The next steps: Public comments, votes by councils in member communities

The prospective members will review the final agreement over the next month and take public comment before deciding whether to join, with a goal of approving the agreement by early 2024.

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Addison Lathers covers growth and development for the Des Moines metro. Reach her at ALathers@registermedia.com and follow her on Twitter at @addisonlathers.