Mahaska Rural Water Serves Notice To Oskaloosa Water
Beacon, Iowa (file photo)
Oskaloosa, Iowa – The Oskaloosa Water Board heard from Randy Pleima, General Manager for Mahaska Rural Water System, that they would no longer be buying water from the Oskaloosa Water Department.
The announcement came at Monday’s Oskaloosa Water Board meeting in which Mahaska Rural Water Department served notice that they would no longer be purchasing water from the Oskaloosa Water Department due to the cost of the water, and also MRW could serve those customers at a lower price.
This satisfies the 180 days written notice for termination of the agreement that has been in place between the two different water departments. The seperation notice took place on June 13, 2019.
The agreement between the two departments dates to 2009 when MRW was growing quickly. After the DNR expressed some concern at that point there wasn’t enough capacity to serve all the rural customers; the DNR recommended MRW work out a deal with Oskaloosa Water to help supply water.
Beacon, one of MRW’s customers, has bought water from Oskaloosa at 1.5 times the rate Oskaloosa water customers pay. A vote by its citizens in 2013 to have MRW take over water and wastewater operations passed, as DNR rules and regulations intensified.
MRW continued to buy water from Oskaloosa Water, offsetting the cost to Beacon customers by utilizing a fund Beacon had previously built up from franchise fees.
Pleima said that the cost to purchase water from Oskaloosa has become prohibitive. “Your rates have constantly been going up.”
Currently, MRW pays Oskaloosa $10.56 for 1000 gallons of water, “which is extremely expensive. Not affordable to the people of Beacon.”
Pleima said that they have not passed the extra cost on to Beacon customers while the Oskaloosa Water rates have continued to increase. Beacon residents will see a change in their bill if they use more than the minimum billed amount, may see upwards of a 40% decrease on the amount over the minimum.
Beyond the City of Beacon, some rural customers have also been piped city of Oskaloosa water. “We’re not going to actively seek out customers that are on [Oskaloosa] water, but if they come to us, we’ll evaluate it on a case by case basis,” added Pleima.
The Oskaloosa Water Department has a lower monthly fee of $16 for 1500 gallons of water, while MRW is $28.00 for the first 2000 gallons of water for rural customers. Each location that MRW serves is slightly different depending on debt load.
“This will obviously have an impact on our utility,” said interim General Manager Matt Van Wyk.
“Obviously, it creates a challenge for the water board,” said Oskaloosa Water Board member Brad Hodges upon hearing the news. “I guess it’s my opinion we would have had some more discussion on what was going on.”
“We were kind of blindsided by the whole thing,” added Hodges.
“We want to keep working together, but we look at this in a business sense,” Pleima added. “We need to get a return on our investment, which we are not doing.”
For the Oskaloosa Water Department, it means there will be $112,000.00 less coming in as revenue per year with the change.
Both Oskaloosa Water and MRW say they want to cooperate moving forward.
