Optional program proposed as a way to update aging water lines in Newton

Editor’s note: The story has been updated to reflect that the proposed program affects private water and sewer lines and not stormwater.

Water issues were brought to the forefront of Newton residents’ minds by the time heavy rainfall and the ensuing floods filled their basements with sewer water in May, and ever since the city has been clamoring to find solutions that would be acceptable to council members and the homeowners demanding them.

In a presentation to the Newton City Council last month, officials were told they could partner with the company HomeServe to better address the private service lines of residents. It would come at no monetary cost to the city and would be presented as a voluntary option for city residents experiencing water issues.

Endorsed by both the National League of Cities and the Iowa League of Cities, HomeServe is a leading provider of home repair solutions that serves more than 4.8 million customers across North America. Out of the 1,300 or so municipal partners across the country, HomeServe has more than 130 in Iowa.

Ashley Shiwarski, senior director of business development for HomeService, said the company has saved Iowans more than $39 million in repair costs. Since its founding in 2003, the company has been working with utilities and cities to help provide solutions to address aging private and public infrastructure.

“We know cities like your’s all across the U.S. are doing their best to either upgrade or maintain your public infrastructure, but your homeowner’s portion of these lines were kind of being forgotten about — not on purpose, but we know there is only so much you can actually do on that private side,” Shiwarski said.

The water work programs offered by HomeServe are intended to be readily and easily available for cities. If the City of Newton partnered with HomeServe, Shiwarski said residents who enroll in the program would be provided protection on external water or well lines, sewer or septic lines and in-home plumbing.

Becoming a partner requires no payment from the city. In fact, the city is actually provided a small revenue stream through the partnership. Shiwarski said 10 percent of all paid premiums would be provided to the city on a yearly basis, which can go towards the general fund.

All of the billing, marketing, claims management and customer service is handled by HomeServe. All the city has to do is help the company spread the word via letters. The city does maintain a level of control over the letters the company sends out to residents. If the city doesn’t approve them, they don’t go out.

The first letter provides the initial education so that even if residents don’t enroll they are at least aware of the program. It also gives residents information about their water lines and which ones they are responsible for. Shiwarski said when HomeServe partners with cities it also utilizes local plumbers for repairs.

HomeServe oftentimes develops a contractor network to serve resident claims. The company does go through a vetting process to verify plumbers are in fact local and are meeting licensing requirements. Eligible plumbers must also undergo a drug test and a background check.

Shiwarski said HomeServe offers three voluntary options for coverage: external water line protection, external sewer line protection and in-home plumbing.

For external water and sewer line protection, HomeServe offers up to $8,500 towards each and every repair incident, which also includes public street or sidewalk repair if it requires more extensive work. In-home plumbing coverage provides up to $3,000 for each and every incident.

There are no limitations on claims and there is no service fee or deductible.

Council member Randy Ervin asked how much $8,500 will go if an incident requires substantial repair work on external water or sewer lines. Newton Utilities Director Jody Rhone said that money would replace most water service lines and a good share of the sanitary sewer service lines.

“There are some that are extremely deep that (the $8,500) may not cover all of it,” Rhone said, noting the cost would also cover other infrastructure repairs. “That’s all part of it. When you get a bid from a contractor, it’s to do all the work. It’s the digging, the replacement of the pipe or fixing it and the street repair.”

From what Rhone has seen, it can cost about $5,000-$6,500 for water line repairs and $6,000-$10,000 for sewer line repairs. Shiwarski noted that 95 percent of HomeServe’s claims across the state have been under the $8,500 coverage limit.

“We don’t tell our plumbers what to charge,” she said. “But a lot of times they do give us a slightly better rate with no call about fees, emergency fees and things like that because they’re getting a lot of work from us and guaranteed timely payment. So that does help us to keep the cost down for your residents.”

But also keep it under the coverage limit. Shiwarski noted that if the city moved forward with the program then residents would not have to call the individual plumbers within HomeServe’s contractor network. The homeowner would just call HomeServe, who then sends out the local plumber to repair as needed.

Plumbers would then bill HomeServe for their services.

Council member Joel Mills asked how much it would cost for residents to enroll. Shiwarski said the pricing for each voluntary coverage item is as follows:

• External water line protection — $7.99 per month

• External sewer line protection — $12.99 per month

• In-home plumbing — $12.99 per month

Residents can get a discount for enrolling in both external protections. They can sign up or cancel at any time, and if they cancel before their term they can receive a refund for any unused premium. Rhone said if this program was something council wanted to move forward with, it can be on the next agenda.