City Hall identity crisis: urban-sprawl police or regional water superpower?

The nearby town of Palo with about 350 households is looking for a supply of treated drinking water, and the options are three: to build its own treatment plant or to build a water main and buy water from either Cedar Rapids or Hiawatha.

This has prompted a nice debate at Cedar Rapids City Hall, a debate that continued last week.

In the end, a consensus of the City Council favors working to see if it can negotiate an agreement with Palo to provide it with water.

Council members, though, noted that the downside of providing quality Cedar Rapids' treated water to Palo is that it might serve as an inducement for people to move to Palo who might otherwise choose to live in Cedar Rapids. It might even convince some light industries, in pursuit of lower property taxes and yet good water, to up and move to Palo, council member Don Karr said.

At the same time, building a water main to Palo also would invite new housing developments and perhaps other kinds of development along the alignment of the water main.

And this is the rub: The City Council and City Manager Jim Prosser have talked at great length for three years now against urban sprawl. In fact, the council has developed policies such as a “smart-growth” scorecard, which gives developers better scores for factors like “infill” development, access to public transit, walkability and access to trails, and lower scores for what the city calls “greenfield” development -- development that sprawls out into corn and bean fields.

On the other hand, council members say that there may be a benefit for the city to sell itself as a regional water provider if such a role would allow the city to spread its fixed costs over more customers. The city now has ample water-treatment capacity to expand, particularly at a time when Pat Ball, the city's utilities director, has noted that a couple of large-use local industries have dug their own wells and are now using their own water for part of their needs.

There is a sense, too, that Cedar Rapids' two water treatment plants, which have just undergone a $40-million upgrade, will be better able to play the role of regional provider than anyone else in the region in an era when the federal government increasingly is raising water quality standards.

Cedar Rapids' water plants already provide water to Robins, some small sections of Marion, some rural Linn County subdivisions and to the Poweshiek Rural Water Association.

The council's arrangements with outside customers differ: some pay 150 percent of the cost of Cedar Rapids users while Robins, for instance, pays 125 percent of the cost and the Poweshiek association pays the same cost as Cedar Rapidians.

Council member Kris Gulick said last week that the city ought to dig into its current rate structure for outside customers and try to come up with a solid business plan that might more accurately tell what rates the city should charge outside customers.

As for Palo, the city of Cedar Rapids only recently signed an agreement with Palo now provides Palo with sanitary sewer service. In other words, the city already has put in a pipe that arguably invites development between the two cities and in Palo.

Bruce Jacobs, the city of Cedar Rapids' utilities engineering manager, also noted last week that Cedar Rapids' stance on urban sprawl when it comes to water would be beside the point in this case if Hiawatha provides Palo with water instead of Cedar Rapids.

Council member Monica Vernon said she “generally favors” cooperation with neighboring communities. At the same time, she said she wanted to see the alignment of any water line between Cedar Rapids and Palo to make sure it benefits Cedar Rapids' growth.

Jacobs said one of city of Cedar Rapids' objectives would be to put the water main on a line “to maximize” use for current and future Cedar Rapids residents and other future Cedar Rapids taxpayers.

Jacobs said the 350 homes in Palo likely would generate about $92,000 of revenue for the city of Cedar Rapids' water-treatment operation. Meanwhile, to build the water main to Palo would cost about $1.25 million, $500,000 of the cost of which would be paid by a new state grant secured by Palo.

Jacobs thought the city of Cedar Rapids would recoup its investment in the water main in about 21 years or in less time if development along the line and in Palo brought in more customers. Palo envisions 860 households in the future, he noted.

In any event, 21 years in Water-Department time isn't very long, Jacobs said.

Council member Tom Podzimek suggested a rate structure in which the city would charge higher rates to larger users in Palo, an arrangement he said could deter light industries from relocating from Cedar Rapids to Palo.