Newton’s water rate will increase by 9 percent effective Aug. 1 and will be reflected on the Aug. 15 billing cycle.
A combination of reduced water sales revenues and increased operating expenses were cited for the increase in rates by the Newton WaterWorks Board of Trustees.
The increased operational expense is in part due to energy, fuel, treatment chemicals, postage and employee costs. Also, the plant needed to borrow funds for the construction of a cover for the water plant backwash tank as well as construction of new main and replacement of existing mains.
“It is the Iowa Department of Natural Resources interpretation of a rule,” Newton WaterWorks Manager L.D. Palmer said. “They have decided that the backwash pit should be covered and now we are waiting on them to decide what type of covering should be built.”
If allowed to cover the exiting structure, the estimated cost for the project is $300,000 to $400,000, Palmer said. Should a new structure need to be built, it could cost more than $500,000.
The rate increase brings the minimum bill of 0 to 200 cubic feet to $10.90 from the $10 currently being charged. All charges more than 200 cubic feet increase from $2.50 per 100 cubic feet to $2.73 per 100 cubic feet. A cubic foot is measured at 748 gallons.
For commercial operations, meters ranging from 5/8-inch to 1.5-inch will increase from $10 to $10.90. That includes meters at 5/8 inch by 3/4 inch, 3/4 inch and 1 inch. There are no changes to all other meter sizes.
Compared to 12 comparable cities, Newton will still be on the low end with only Clive, Oskaloosa and West Des Moines charger cheaper rates, with those only ranging from 64 cents to 17 center under Newton for a minimum bill.
“The cost of water is still a great bargain at about $0.0032 per gallon while the national average is $0.0048 per gallon,” Palmer said.
Projected revenue requirements to determine the rates were based on the fiscal year 2017-2017 budget. As a part of the budget, cash reserves must be maintained in order to finance capital projects, system updates and emergency unbudgeted occurrences.
Water rates and user charges are determined by the Newton WaterWorks Board of Trustees while sewer and solid waste rates are determined by the Newton City Council. The WaterWorks is funded 100 percent from water sales.
Contact Jamee A. Pierson at 641-792-3121 ext. 6534 or jpierson@newtondailynews.com