The City of Dickinson is currently reviewing its Southwest Water Authority (SWA) Pipeline Project Contract, which includes rate adjustments for 2022, as they negotiate the terms of contract agreement for customer transfers to city water.
During a work session Tuesday, Nov. 16, at City Hall, the Dickinson City Commission heard from City Attorney Christina Wenko and Public Works Director Gary Zuroff on the SWA Pipeline Project Contract and how the contract water rate is slated to increase from $5.60 per 1,000 gallons to $5.71 per 1,000 gallons. The change would take effect Jan. 1, 2022.
According to city documents, “Each year, Southwest Water Authority carefully reviews current and future financials to determine the following year’s budget and any need for rate changes. It is done with the understanding that future rates must reflect the expenses necessary to help assure continued water quality and reliable flows to all of SWA’s customers. There are many fixed costs, such as power costs, telephone services, heat, fuel, electric service for cathodic protection, salaries, training, insurance, building expenses, vehicle expenses, system maintenance and some equipment replacement.”
Wenko noted in the meeting that it’s important that the city looks at all of the costs before final approval — a testament shared by Zuroff.
“Normally, the city has just taken that 11 cents and transferred it to our utility rates,” Zuroff said, adding that if there’s other revenue to cover that cost, the city would bear that rate increase. “... But normally, whatever Southwest Water rates increase, the city would put that on the utility bill and increase our costs. (With) our sewer water rates, we haven’t increased in a number of years mostly because if Southwest Water increases, it’s hard to increase it anymore.”
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The State Water Commission has until Feb. 15, 2022, to notify SWA of its approval or if they have any issues with the contract.
“It is important to know SWA does not take rate changes lightly and have recently reduced any unnecessary expenses to remain cost efficient,” city documents read.
The city has experienced growth in recent years. As Dickinson’s population rises, the city “may desire to provide water service to customers and areas within the service area,” a statement read from the Southwest Pipeline Project Contract for Transfer of Service Area.
“This is the agreement that was done for a transfer between the city water and a Southwest Water customer. When the city did expand its city limits, there were Southwest Water customers; so we had to pay Southwest Water to bring them into the city’s systems,” Zuroff said, adding that the City of Dickinson had to pay the disconnect fee and capital repayment fee — which was $4,000 to $5,000 per customer.
This agreement was previously almost 5 years ago, Zuroff noted, saying that it is something that the city wants to review again.
“... We are having developers come to us asking for city water. They don’t feel that they can get it from Southwest Water… If we have the capacity to provide a monitor, the city has to pay Southwest Water to provide water to them, although we get water from Southwest Water,” he said, explaining that SWA is still selling water with this contract rate agreement.
In the coming weeks, officials from the City of Dickinson will meet with SWA representatives to review this contract in detail and the agreement on the transfer of services. Zuroff said he hopes the discussion will also focus on whether the Dickinson City Commission wants to provide water outside city limits.
“So originally, that land transfer agreement was when we annexed and expanded the city limits. A lot of the developments now aren’t really looking at becoming part of the city, but they are currently just trying to get water somehow,” he said. “And so, that’s another part of that discussion. Is the city going to require water outside city limits? What discussion can we have with Southwest Water? My goal is to provide people water and I think Southwest Water is too. It’s just trying to cut through that red tape.”
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The city’s sewer services have already expanded, Zuroff said.
“We have sewer services all the way to the refinery and we have sewer all the way to 116 (Avenue). So we’re already expanding our sewer 2 miles out,” he added.
