The Des Moines Water Works appears to be on track to acquire the assets and accounts – and $12 million in federal debt — of the Southeast Polk Rural Water District, with the deal likely to be completed by fall.

“I don’t know of any place in Iowa that has done this, so we’re taking it slow,” said L.D. McMullen, general manager and CEO of the Water Works. His facility already sells water to the Southeast Polk district, and McMullen calls the proposed move “more of a merger” than an acquisition.

The Water Works would issue water revenue bonds in the amount of $12 million, then repay the debt over 20 years through water system revenues. Polk County would also be involved, issuing $5 million in 20-year general obligation bonds to handle the interest costs of the existing debt.

Backers of the proposal have assured Southeast Polk customers at public meetings that their water bills will be cut in half. The deal won’t cause much change in the debt service levy paid by Polk County taxpayers, because the new debt will be acquired as previous debts are being retired.

McMullen said three steps need to take place for the merger to take place:

The Iowa Legislature must change the law to describe how such a merger should occur. That measure easily passed the House and Senate and awaits the governor’s signature.

The financing plan must be agreed to by all parties.

Details of a transition plan will have to be worked out. “How do you transfer the billing and collection system?” McMullen asked rhetorically. “How are the Southeast Polk employees going to be merged with the Water Works? All the nuts-and-bolts stuff, we’re just starting to work on.”

The Southeast Polk system currently serves about 2,500 customers in an area that stretches from north of Polk City to east of Runnells. In an odd legal twist, Polk County can become involved in the merger only if the area, predominantly farmland, is declared an urban renewal area.

Residents of the area have received agreement forms in the mail and are asked to “opt in” to the urban renewal proposal. The law makes no provision about how many residents must agree, but Jim Elza, land use planning manager for Polk County, said at a recent public meeting in Bondurant, “we need a majority of owners to agree for this to make sense.”