House to debate bill relating to rural water dispute

The Iowa House will debate a proposed bill that would alter the way cities interact with rural water authorities.

House File 516 aims to re-establish water service requirements and determine fair compensation for buyouts of rural water agencies. The bill would prohibit rural water associations from providing water within 2 miles of the city as of July 1 unless it gives notice and submits a plan to provide service or increase or replace existing services to the city.

The issue came into crisp focus locally in July when the city refused to issue Liberty Baptist Church an occupancy permit for its new youth center on 18th Avenue because the rural water provider, Central Iowa Water Association (CIWA), was unable to provide the necessary fire suppression.

Randy Mason, pastor for the church, previously expressed frustration that the city allowed the construction to proceed at every juncture but stonewalled it once it discovered CIWA would have exclusive water rights to the building.

A federal ruling dating back 80 years gives CIWA rights to the area.

H.F. 516 puts the burden of pointing out such discrepancies on the rural water association, specifying that it must bring such exclusive rights to the attention of the city in its plan, which also requires rural water to detail which areas within 2 miles of the city it intends to serve for the next four years.

Steve Sincox, general manager of the Marshalltown Water Works, said the bill would help negotiations with CIWA. He said it will hold rural water associations to the same standard as cities and established how much rural water service areas are worth, both of which are key issuing that need to be addressed. He said interpretations as to what constitutes “fair” compensation often slow negotiations.

“It’s like buying a used car,” he said.

The file values service areas at the original cost plus up to the amount of net revenue lost over 10 years based on the rural water association’s most recent audit preceding the buyout.

Sincox said the issue is one of economic development on Highway 30.

Tom Deimerly, president of Marshall Economic Development Impact Committee (MEDIC), said the corridor along Highway 30 is the prime corridor for development as the city continues to expand to the south.

Although Deimerly said he could not point to any particular project the city has lost out on because of water rights disputes, good economic planning calls for the city to look at what could potentially be a problem in the future.

“Until this issue is rectified, we will have limited opportunities from prospective businesses,” he said.

But CIWA doesn’t want to sell its territory.

Jim LaPlant, CEO of CIWA, said the bill is anti-economic development, anti-competition and pro-monopoly. He said the bill would kill rural water associations and is promoted by city bureaucrats and empire builders who want job security.

The legislation would force CIWA to significantly reduce its purchases from the Marshalltown Water Works, he said. LaPlant said the bill has a chilling effect on economic development because it stifles competition and that it increases overhead costs for both the water works and CIWA, which will lead to higher rates for consumers.

“The bottom line is Central Iowa Water Association is concerned about the declining rural population in Iowa and the negative impact of this legislation,” he said. “The higher rates would be the result of higher costs being spread over a declining rural customer base.”

Mason said his situation has only been partially resolved. The Fire Marshal has allowed the first of two buildings in the church’s youth center to use a sprinkler system for fire suppression, and CIWA has worked with him extensively to find a solution. But the Water Works has not compromised at all. He even offered to pay a monthly rate for fire suppression.

Deimerly said although the city is positioned for grown in that area, utility access is a big sticking point for prospective developers.

The topic is set for debate in the House Monday.