Due to concerns from council members that the City of Newton might be able to keep 10 percent royalties from premiums collected under a voluntary water line guarantee program, staff met with the company that provided the services and presented officials with a new contract that no longer provides any such revenue stream for the city.

The Newton City Council voted earlier this month to put on hold the city’s agreement with Utility Service Partners, a HomeServe company that partners with the National League of Cities to manage the warranty program. Council member Stacy Simbro suggested the 10 percent the city received should go back to residents.

The program essentially functions as a voluntary insurance program for residents and does not cost the city any money. However, it does require a marketing agreement with the city so that utility providers can access the City of Newton branding when sending letters to residents.

All letters must be approved by the city before being sent to residents.

Newton City Manager Matt Muckler told Newton News that two different types of contracts are offered to cities for this program. The contract that is typically offered to cities is the one where a municipality gets access to an additional revenue stream. The council chose the royalty-free contract.

“As a result, the amount they now charge residents for the same level of insurance will be lower because the city is not generating any additional revenue,” Muckler said.

Ultimately, the rebate for residents amounts to $0.50 saved per month. The program offers three types of services: external water service line ($7.49), external sewer service line ($12.49), and internal plumbing and sewer service lines ($12.49). There are no service fees or deductibles or annual or lifetime limits.

When the city first discussed the idea of ​​the water main guarantee program, it was proposed that the additional revenue be used for a hardship fund that would have been earmarked for lower-income individuals who might have greater difficulty paying for water or sewer line repairs.

Council meetings discussed all sorts of water issues residents face. Muckler stressed that the water line guarantee program does not apply to stormwater, but to water lines and sewer lines. Now that the program is approved, residents can decide whether they want to enroll.

According to city documents, the program will help the city achieve its goals by:

• Provide homeowners with affordable protection against significant and unexpected costs for repairing leaky/broken/clogged water lines, sewer lines and in-house plumbing lines.

• Ensuring the provision of timely, high quality repair services in compliance with all applicable regulations.

• Providing an exemplary service that has a positive impact on the city.

• Engaging carefully vetted local contractors to carry out the repairs.

Muckler said citizens should know that HomeServe is a company that participates in the water line warranty program and also Black Hills Energy. But the programs they offer are different. The city manager urged citizens to understand the differences between these two programs.