By Ken Sain
Managing Editor
Councilman Mark Stewart suffered a bit of sticker shock when Public Works & Utilities Director John Knudson stepped up to the podium at the Sept. 19 Council meeting.
“Wow,” Stewart said after learning the cost for chemicals to treat water had jumped 44%.
Council was looking at two items on its study session consent agenda that dealt with water treatment chemicals: one for about $11.2 million for the city’s treatment plants and another that was close to $4.4 million for city treatment plants and swimming pools for a combined total of close to $15.6 million.
“There are many different influences that are affecting our costs today,” Knudson said. “I’ll give you a kind of the rundown. Obviously, labor, delivery costs, and supply chain issues for all of our chemical suppliers. And there’s one other thing that has come up that we’ve noticed.”
Knudson said the added expense is a tax that Congress added in the Infrastructure and Jobs Act that went into effect in July. The tax is the Superfund chemical excise tax that started in the 1980s but Congress ended in 1995.
“And the bad thing about it is the cost of that can be up to about $9.50 per ton of the chemicals that we bring in. And we’re bringing in, as I said, truckloads and truckloads.”
Other factors forcing prices up are a shortage of raw materials and a number of chemical production facilities have closed.
Knudson said the overall increase of 44% has been driven by a few chemicals that have seen huge increases. Knudson said bleach is up 93%, and sodium hydroxide, or lye, is up 100%.
Only about $430,000 of the money would go toward treating water for the city’s swimming pools.
Stewart asked if the city would be able to absorb the cost without passing the increase on to its customers.
Knudson said that for now, the city can. He added the city takes a look at its water rates and costs on a two-year cycle to make sure they are charging enough to cover costs. The last increase came on July 1 of this year.
He said the city will begin the process of looking at utility rates and costs in the coming months for another possible adjustment in 2024.
“Fortunately, for us, our rates are very, very low,” Knudson said. “Our rate increases that we’ve planned are quite low. So if we do have to adjust based on revenue and expenses that we will review, it could affect us, but it shouldn’t be too much.”
Stewart took aim at the federal government.
“It sounds like another overreaction in inflationary causes from the federal government and our residents are going to have to bite this one too,” Stewart said. “It’s a shame.”
