November 24, 2014

Investment in Aging Water Infrastructure and Degraded Source Water

PumpsIn setting water rates and the proposed budget for 2015, the Board of Water Works Trustees has demonstrated a continued commitment to investing in Des Moines’ aging water infrastructure and providing safe water to customers, despite increasingly poor quality of source waters.

“While Des Moines Water Works has a long history of substantial reinvestment in water infrastructure, the aging of our assets and our increasing concerns about the impacts of climate change requires even greater investment going forward,” said Bill Stowe, Des Moines Water Works CEO and General Manager. “The degradation of our infrastructure is evidenced by the increasing number of main breaks, and affects our mission to provide a quality and reliable service to our customers.”

The Board of Water Works Trustees believe in a funding philosophy of “pay as you go,” where improvements and replacements are funded through rates and not funded by debt, all while maintaining reasonable water rates in relation to the rest of the country.

The proposed Des Moines Water Works’ 2015 calendar year budget includes rate increases for Des Moines, total service, and wholesale water customers. The rate increases include a 7% increase for Des Moines and total service customers and a 5% increase for wholesale customers, namely suburban customers who purchase water from Des Moines Water Works to resell to their residents. The 7% rate increase is only for the water portion of the monthly bill, not city services that Des Moines Water Works collects for city agencies. For a typical four-person household inside the city of Des Moines, the 7% increase equates to an additional $1.65 on a customer’s monthly water bill.

Certain service areas, such as unincorporated Polk County, have greater capital needs to combat an aging system and accommodate growth. Beyond a 7% increase in rates, those customers will have an additional $1.50/thousand gallon fee that will fund significant capital improvements in the service area.

The 7% increase for Des Moines customers is fundamental to supporting operations and a healthy capital reinvestment program, including facilities necessary to adequately treat source waters that continue to degrade.

“Delivering safe and reliable water to our customers is a capital intensive responsibility,” said Stowe. “Even while working efficiently, the costs for treatment and distribution of water continue to rise. To not invest in critical water infrastructure and capital improvement projects would be irresponsible.”

In addition to investment in the aging infrastructure, the 2015 rates reflect the nearly $1 million Des Moines Water Works spent in 2013 to reduce nitrate concentrations found in Des Moines Water Works’ source waters to a level below the U.S. Environmental Protection Agency’s safe drinking water standard.

Within the proposed 2015 budget, 16% of the utility’s capital budget will be spent on improvements to naturally reduce rising nitrate levels in source waters. This includes the use of sand quarries and gravel pits that naturally filter nitrate – a longer term investment and more cost effective solution in comparison to operating and expanding the expensive nitrate removal facility.

New water rates will go into effect April 1, 2015. A complete listing of Des Moines Water Works’ 2015 water rate structure is available at www.dmww.com/upl/documents/library/2015-water-rates.pdf.

Posted by: Laura Sarcone No Comments
Labels: , , , , Posted in Infrastructure, Rates, Value of Water, Water Quality

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