Aledo, Joy begin talks about costs for Joy to buy water
The Aledo City Council's Water, Sewer, and Storm Drain Committee and officials from the Village of Joy met Monday (Nov. 23) to discuss Aledo's possible sale of water to its neighbor to the west.
Although the two sides disagreed on what the price of the water should be, it was agreed to meet again for further discussion. Aledo will provide Joy officials with a copy of its budget and Joy will give Aledo a copy of the presentation given at the meeting by Joy Village Engineer, Judd Giffin.
Joy Village President Todd Heath was among those present for the meeting, along with committee members and Aledo City Clerk Jarod Dale.
An agreement was reached April 23, 2014, for Joy to connect to the Aledo water system. That connection was completed in August of this year.
The original agreement called for Joy to pay $16.11 for the first 100 cubic feet of metered water used, plus $3.16 for each additional unit of 100 cubic feet used. On Sept. 19, 2015, Aledo raised its water rates. Effective Jan. 1, 2016, the monthly service charge is to be $17.33 per account, which includes the cost of debt service to the water supply system. The Basic User Rate will increase to $3.19.
The April 2014 agreement included provisions for a change in rates for Joy if Aledo increased rates to its own customers. Using the village's consumption rates from September 2014 through August 2015, the village would pay an average monthly cost of almost $5.9 million ($17.33 monthly service charge plus $5,876 Basic User Rate at 184,210 cubic feet). On an annual basis, consumption costs would total about $70,723.
In his presentation, Giffin said Galesburg sells water to its out-of-town customers at $1.83 for each additional unit of 100 cubic feet, compared to Aledo's proposed $3.19.
"You're increasing your bottom line by $22,000 …. if you sold water to Joy at the same cost Galesburg sells water to other communities," he said, making the argument a lower price for water for Joy would still benefit Aledo.
Giffin said if the village is going to buy water on an ongoing basis, it needs money to maintain its own system.
"It's a difference of about $75,000 per year and $27,000," the engineer said. "It doesn't make sense to them."
Aledo City Admininistrator Bob Mahrt disagreed with Giffin's analysis.
"The City of Aledo's cost for producing water is not the same as Galesburg's," Mahrt said.
He said Galesburg's costs are likely lower because of economies of scale for the larger city, which sells water to a number of communities.
One major point of dispute was whether Joy should pay part of Aledo's distribution costs.
"I'm saying distribution has nothing to do with the Village of Joy," Giffin said. "Do you want to sell water or do you not want to sell water?"
"I disagree with your assumption distribution should be taken out of the mix," Mahrt said. "We cannot sell water at the same price as the City of Galesburg, I can say that right now."
He added that the costs being discussed Monday were a "starting point."
"We just want to establish what's reasonable," Giffin agreed. "The discussion here is what is a fair and reasonable cost."
It was apparent the two sides need time to think things over and study the numbers.
Aledo Mayor Chris Hagloch noted if an agreement can't be reached, Joy officials will have to work on parts of their water plant in need of repair. That could be costly, as it likely would mean selling bonds.
"You're asking us to sell water to Village of Joy residents cheaper than we provide it to our own residents," Hagloch said.
"I need to process this," Aledo Alderman Tom Watkins said. "What concerns me is what it costs us to provide water to you and what is a fair and equitable cost" to charge the village.
Discussion later in the meeting indicated the two sides likely will meet again in January.