A draft document that would govern how a new regional water utility would operate is now available for public comment.

Created by the Des Moines Water Works, the draft 28E-28F agreement is named for the Iowa Code chapters governing such arrangements. It outlines how Central Iowa Water Works could function, its responsibilities and role in long-range planning for drinking water needs and setting water rates, and a suggested composition of its voting board. 

The Des Moines Water Works board of directors filed the agreement last week. That kicks off a months-long process of negotiating with 13 potential member communities and their customers. It’s estimated that city councils or utility boards will vote by the fourth quarter of this year on whether to join Central Iowa Water Works.

The utility could form as early as Jan. 1, 2023, with the first billing cycle to begin July 1 of that year. 

Planning for the regional water utility started about five years ago. The new model would move away from the current arrangement in which a single entity, Des Moines Water Works, controls a majority of the region’s water service, instead establishing a board with a representative from each city that chooses to join, plus two from Iowa’s capital city.

More:Here’s a closer look at the proposed Central Iowa Water Works before utilities vote on whether to join

Des Moines Water Works produces 80% of the water consumed in the 700,000-population metro, and a majority of it is used by residents of suburban cities that buy it at a wholesale rate set by the Des Moines utility. 

“The elevator spiel on what’s the big picture is pretty simple: best management of the available water resources in central Iowa, fair and equitable distribution of the costs to all customers, and reliability and resiliency, trying to create a system where all the facilities basically serve everybody,” said Ted Corrigan, Des Moines Water Works CEO and general manager. “And those are really the reasons that are sort of overarching and benefit everyone.”

Financial benefits to cities would vary. For most, it would hold down future cost increases. West Des Moines for example, has said the move to a regional utility could save consumers there up to 30% over the next four decades. In Des Moines, if all  communities join, the bill for an average customers would fall by 8-10%, said Amy Kahler, chief financial officer at Des Moines Water Works.

How the Central Iowa Water Works agreement would work

The draft agreement (read below) follows a year-long effort by water utilities in Des Moines, West Des Moines and Urbandale to create a framework for the proposed utility. Des Moines Water Works then led the charge to put the framework into the proscribed format of the 28E-28F agreement, which under Iowa law allows for “joint exercise of governmental powers.”

Corrigan said the agreement closely matches the framework, with the addition of several scenarios including how a community could join later if it decides not to be a founding member and how a community could leave Central Iowa Water Works. 

More:Des Moines Water Works’ lawsuit angered Iowa farmers; now utility, ag department join to encourage cover crops

Under the agreement, cities that choose to join would transfer ownership of their existing water source, treatment and transmission lines to Central Iowa Water Works, which would manage them as a regional entity and serve as the “exclusive water supply provider” to member communities. 

Each city would still maintain its local distribution lines, fire hydrants, water towers and valves — all the equipment that gets water to its homes and businesses — and would still be responsible for setting rates and billing its customers. It’s a model similar to the current one: Des Moines Water Works wholesales water to the cities, which set their own rates to recoup the costs of delivering it to customers and maintaining their local systems.

Besides managing daily water needs, Central Iowa Water Works also would plan for future water use in the Midwest’s fastest-growing large metropolitan area. Under the agreement, the utility’s board, within a year, would hire an engineering consultant to create a new long-term plan. 

Additionally, the agreement outlines how much it would cost each city to join Central Iowa Water Works. It provides a complex funding formula that takes into account assets, five-year average water use, reserves and future water needs.

While each city would pay $2 million in startup fees, the remainder of what they owe would be dependent on how many communities opt to join and what investments are made between now and when the regional utility is set up. 

“It’s like a sample problem in a text book,” Corrigan said. “You can do a lot of what-ifs … but you can kind of get an order of magnitude. Is it going to be $2 million or is it going to be $10 million? They can get a sense of that.”

To help gain a better understanding of who is interested in joining Central Iowa Water Works, city councils and utilities have been asked to vote on a non-binding founding resolution that says they will begin negotiating terms of the agreement. 

“That’s kind of the beauty of this founding resolution, because it’s an early signal of who is interested in joining. And if we have a couple who do not sign that, then that seems to be an answer early on in the process,” Kahler said. “So I think that that was really good mechanism.”

Boards that govern West Des Moines Water Works, the Urbandale Water Utility and the Xenia Rural Water District have each voted to begin negotiations. So have city councils in Waukee, Ankeny and Clive.

Corrigan said he is hopeful other cities will vote in the first quarter of the year. 

Each city interested in joining is must read over the draft 28E-28F agreement and submit comments or changes to Des Moines Water Works staff and legal counsel. Public comments also may  be submitted prior to the final agreement’s passage.

Your chance to weigh in 

Communities will likely schedule their own listening sessions on the Central Iowa Water Works draft 28E-28F agreement, with two public open houses planned by Des Moines Water Works this week:

• 11:30 a.m.-1:30 p.m. March 2 at the Central Library, 1000 Grand Ave.

• 4:30-6:30 p.m. March 3 at the East Side Library, 2559 Hubbell Ave. 

Kim Norvell covers growth and development for the Register. Reach her at [email protected] or 515-284-8259. Follow her on Twitter @KimNorvellDMR.

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