Water Rate Increase Proposed After Rate Study in Sioux Center

June 16, 2021 7:41am

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The Sioux Center City Council recently reviewed a water rate study with a professional rate analyst exploring the local water utility’s costs and future needs as it serves the growing community.

Tim Miller, director of rates at Missouri River Energy Services, shared the cost-of-service study for the Sioux Center water utility, looking at future growth and expenses, and seeking how to appropriately allocate the cost to provide water among users. Miller noted that the water utility continues to anticipate ongoing system improvements, replacements and growth.

“You guys are staying on top of it with your growth and also replacing things,” said Tim Miller, of Missouri River Energy Services, who provided a water rate study for Sioux Center. “It all goes back to the system and provides a good service.”

The water utility’s five-year plan includes a new water tower in southern Sioux Center to help serve the community, accepting high-quality water from the Lewis & Clark Regional Water System to mix with Sioux Center’s local water supply, replacing aging water mains under Highway 75 with mains that will run parallel to the highway, and necessary upgrades and repairs to the system.

Miller noted that, at the current rates, the utility would potentially see a deficit in net income as soon as 2025, and he recommended about 5 percent increases in each year from 2021 to 2024, with a slightly smaller percentage for residential meters and slightly higher percentage for larger meters, reflecting the higher cost to the water utility to serve larger customers.

The council held the first reading of an ordinance that would approve increases for 2021 and 2022. If approved, the average household will see about a $1 increase in their monthly water bill on Oct. 1 of this year, about a 3% increase. (This bill reflects usage in the last week in August and most of September.) The average home would see a similar increase of about $1 starting on Oct. 1, 2022.

The proposed increases are slightly higher for commercial, industrial, and irrigation water customers, about 7% overall for each of the two years. The water rate changes will be brought before the city council for a second and third reading, then the council will decide whether to approve them.