Serving O'Brien & Clay Counties

Royal council considers turning water system over to ILRW

Pros, cons of proposal from supplier to be discussed further

The future of Royal's water system was a major item of discussion during the city council meeting on Feb. 8.

Royal currently purchases water from Iowa Lakes Regional Water (ILRW) and distributes it through its own system. Council members have been discussing the need to replace aging water mains, update meters and modernize the city's billing system.

The possibility of turning Royal's water system over to ILRW was discussed during a recent meeting with CEO Brad Veit. From those discussions, ILRW prepared a proposal for acquiring the city's water distribution system.

"They would assume all of Royal's infrastructure as it is right now, water tower included, under their control," Mayor Josh Toft explained.

The council is in the process of increasing Royal's water rates. However, they feel the increased revenues will not be enough to finance the water system's infrastructure needs.

Another concern is a potential future expense to extend the current agreement with Iowa Lakes Regional Water. According to discussion, the current 40-year contract is due to expire in 2028. Royal was assessed a $37,227 fee in 1988 in order to purchase water from ILRW. Based on what other communities are being charged to renew their agreements, Toft estimates Royal's fee will be "in the range of one million dollars."

If the council accepts the proposal, ILRW would bill water fees directly to customers and could also bill the city's garbage and sewer charges. Any problems with water infrastructure would be handled by ILRW and not the city.

"I don't see why we should manage the water system. Right now the city is managing the system for ILRW because the city gets its water from them," said Council Member Matt Goyette.

According to the proposal, rates charged by ILRW would be higher than Royal's proposed new rates. Toft and council members foresee some "pushback" from local residents because of the higher rates.

However, council members agreed that additional rate increases would be necessary if the city keeps the water system.

"If we don't go with rural water, when do we raise rates a ton?" asked Council Member Sara Ricke. "If this does not go through, we'll have to revisit our rates immediately. We can't wait a year."

Veit is expected to attend the March council meeting to answer questions about the proposal. The council discussed distributing information flyers to local households and holding a public meeting to further explain the proposal.

• Water tower painting

The council agreed to move forward with painting the water tower. A bid totaling $39,100 from Central Tank Coatings, of Elgin, was accepted last October; however, the company did not receive the final documents.

"We approved the agreement so we should work with them in good faith," said Council Member Mitch Fahnlander.

The cost for painting the tower exterior will be paid with American Rescue Plan Act funds.

• Equipment maintenance, purchases

In other business, council members authorized Maintenance Superintendent Sherman Nielsen to have the payloader serviced. He recommended the payloader be gone over as it has approximately 1,900 hours.

Nielsen reported that he has ordered the chipper which will be purchased with Living Roadway Trust Fund grant funding, and is also obtaining prices for a new Bobcat skid loader. The current skid loader was purchased in 2016. The council previously decided that city equipment should be replaced on a rotating basis.

"I definitely think we need to buy one, otherwise we're just kicking it down the road," said Council Member Jeff Van Westen.