One of Iowa’s rural water companies that once neared a financial melt-down is finally able to see hope flow.
The troubled Xenia Rural Water District is doing better and is now ready to approve a plan that will hopefully send the company back into the black
When Dan Lovett took over as chairman for the Xenia Water Board a few months ago, he had his hands full.
“We inherited a mess, and I think everyone has really tried hard to make it work, but we had to build a lot of bridges and do a lot of talking,” says Lovett.
Xenia has been in hot water since 2009, that’s when the company went broke and couldn’t pay back debts totaling more than 135 million dollars to the USDA and an insurance company.
Since then, a new board took over, sold off land and equipment and negotiated with creditors.
Lovett says at this week’s board meeting, they’ll pass an agreement with the insurance company to start paying back their debt which will then allow the USDA to re-write Xenia’s loan dropping the interest rate by nearly two and half percent.
“Hopefully we`ll be able to get the USDA to re-finance our loan and that will save the district almost 22 million dollars over the life of the USDA loan,” says Lovett.
The agreement will start the slow process of bringing Xenia back into the black, but it most likely won’t lower customers’ rates.
“The rates have been going up, very high, the highest I think in the country. And a very steep rate the last 4 or 5 years and we`re hoping that they can level off here in another year or two,” says Lovett.
Lovett says he knows customers in the 12 counties Xenia serves are frustrated.
However, he’s confident Xenia is on the mend and with a new plan soon to be approved, it will only take time for people to get back on board.
“We`re still providing high quality water, and it`s still getting to them and being distributed, I think people are frustrated with the costs but we`ve done everything we can to hold the costs down,” says Lovett.
Xenia has also cut back on its workforce. Going from 130 employees to around 30 to help save on costs.
The board will vote on the debt reduction plan during Thursday’s board meeting.