Upcoming water decisions and a four-year rate plan for Water Rates. What Does That Mean for Customers?

BONDURANT, Iowa (February 17, 2023) –The City of Bondurant has contracted with Des Moines Water Works for nearly two decades for wholesale water production. Des Moines Water Works has increased rates consistently over the past several years, which affects customers in Des Moines, Pleasant Hill, Windsor Heights, and a handful of other small communities that purchase water directly from the utility.

Due to the cost of infrastructure improvements and treatment and increasing demand for water supply, over the past few years there have been discussions amongst several cities (including Bondurant) Des Moines Water Works, and West Des Moines Water Works related to a regional water utility or regional water governance. Parallel to those discussions, the City has been exploring the possibility of producing and treating water independently again. The reason the City is pursuing a water facilities study is to determine the feasibility of producing its own water, which could give the City as much direct control over costs as possible. Preliminary results are proving to be very encouraging. The City is approaching a fork in the road where a determination will need to be made. There are major capital investments on the horizon, regardless of which path is pursued.

While conducting financial modeling and engaging in regional discussion, it became clear that the fiscally responsible thing to do would be to create a four-year rate plan to address operational and capital needs. The rate plan is needed regardless of whether the determination is made to participate in regional water production and governance or whether the City re-establishes independent water production. Below is a table showing the four-year rate plan.

Below is a graph showing communities’ projected utility rates in the metropolitan area and including the City’s future rate (the rate effective April 1, 2023). The below calculation is based on the average consumption of a residential-class customer over the past year at 3216.6666667 gallons per month. The utilities that were surveyed were water, sewer, stormwater, garbage, and recycling.  (Please note that Ankeny and Indianola do not provide garbage. The residents are required to set up services with a provider of their choosing and an average of $15 per month was used for the calculation.)  Additionally, some communities do not fully administer sewer services.  In these cases, the area has a sewer district that levies taxes to support the sewer services.  Bondurant is towards the middle of the group, with an average monthly bill of $90.21. The average for the metropolitan area is $86.90 per month, and the median for the metropolitan area is $87.56. While it is difficult to make a full apples-to-apples comparison given the use of taxing authority sewer districts, it is still a reasonably close comparison.

Staff continually looks for ways to maximize efficiency to keep rates as low as possible through automation and strategic operations management. The City continues to strive to keep costs low and will continue to look for ways to contain costs to reduce or delay future rate adjustments.