Newton Advocates for Fair Water Pricing from IRUA

Imagine setting your own price for fuel when filling your vehicle and paying the cashier far less than the price shown on the pump. How long would you be allowed to keep purchasing fuel at that station, and how long could that station keep operating?

IRUA (Iowa Regional Utilities Association) purchases water from several cities, including Newton, Marshalltown and Pella, to service its customers in central Iowa. Currently, they are paying the City of Newton less for the water it purchases than it costs the City to make.

Last year a cost-of-service study was conducted by engineering company Bolten & Menk to determine the cost of providing water. The study determined it costs the City of Newton over three dollars per 1,000 gallons to provide IRUA water. Currently IRUA is paying less than two dollars per 1,000 gallons, and there has not been a rate increase since 2019. As a comparison, IRUA presently pays Pella over four dollars per 1,000 gallons.

Despite the City raising IRUA's rate in accordance with the contract between the parties, IRUA has refused to pay the new amount. At this point IRUA owes the City of Newton hundreds of thousands of dollars in back payments due to the high volume of water IRUA purchases, which it then resells to its customers at a higher price.

Recently the Newton city council needed to approve a nearly three-million-dollar loan agreement to pay for projects and equipment for the Water Department. (Per Iowa law, any money borrowed for a city water department must be paid by Water Department revenue and not by property tax revenue.) The Water Department's immediate and long-term planning is nearly impossible, because IRUA has refused to commit to a new rate or monthly volume of water to be used.

This City's position is that it is unfair for IRUA to push the costs of its water purchases onto the other users of the Water Department-the residents of Newton. The City of Newton and its residents simply ask IRUA to pay a fair price. I expect IRUA customers would want the same.

Mayor Evelyn George
City of Newton