(Milford)– Milford residents could soon see a significant increase in water rates to help defray costs of a new water treatment plant that’s currently under construction.
The Board of Trustees of Milford Municipal Utilities met in special session Tuesday evening to review new rate projections, which were revised from an earlier analysis. The new increase being proposed is 11 percent per end-user, up considerably from an earlier recommendation. Todd Johnson, Chairman of the MMU Board, tells KUOO news the earlier projection had a miscalculation in it for charges to West Okoboji, which purchases water from MMU…
“We were hoping it was going to be in that three to five percent range. We’ve got a brand new water treatment plant, we were relying on financial projections and some of those projections weren’t as accurate as we would like so we’re having to make some changes to our rate increases.”
A financial consultant who performed the rate analysis told trustees the 11 percent increase is needed to fulfill financial requirements of an SRF loan for the new water treatment plant.
Johnson says the new plant stems, in part, from regulations from the Iowa DNR and is needed to meet projected future growth…
“Well the plant’s being build so it can add some capacity. There’s some minimum requirements that the DNR requires as far as how big the plant is based upon maximum water usage, basically demand, how much capacity we have to have. The plant is being built so that we can add capacity down the road. It may take another water intake, but our hope is that the existing plant we have is 47 years old. We’re hoping this next plant will get us the same number.”
The new plant is designed to have an output of 2.7 million gallons a day, compared to 1.8 million with the current facility. Johnson says it would have been irresponsible to build a new plant without factoring in future growth projections. He adds they were reluctant to spend money renovating a 47-year-old plant.
Johnson says the board will take formal action on the proposed 11 percent rate increase at their next regular meeting…
“My understand is that rate will go in effect in, I believe it’s July, since that’s our year, and then it would be re-evaluated in probably March of next year to see where we’re at cash flow wise.”
The last time MMU adjusted water rates was 2024.
Paul Sieh, a member of the West Okoboji City Council who was at Tuesday evening’s meeting, hinted at the possibility of that city looking at other options for a water source, asking MMU trustees if they would block any attempt by West Okoboji to seek an agreement with another provider.
