Archive for Monday, November 2, 2009

Baldwin City, RWD No. 4 eye cheaper options for water

The water tower north of Baldwin City could be getting filled with water that's not from Lawrence's treatment plant if plans for purchasing it from a Johnson County Rural Water District come through. Baldwin City Mayor Ken Wagner is pursuing different options because of the high price of Lawrence water.

The water tower north of Baldwin City could be getting filled with water that's not from Lawrence's treatment plant if plans for purchasing it from a Johnson County Rural Water District come through. Baldwin City Mayor Ken Wagner is pursuing different options because of the high price of Lawrence water.

November 2, 2009

For decades there’s been a big business in Lawrence City Hall that stretches well beyond the borders of the city limits.

It is the water business.

The city of Lawrence has long been the largest provider of treated water in the Douglas County area. Water that gets processed at one of the city’s two treatment plants flows to a host of Douglas County rural water districts, and also to the cities of Baldwin City, Wellsville and Edgerton.

But now, the city’s perch atop the water wheel may be a little more precarious. The reason: “They’re beginning to price themselves out of the market,” said Baldwin City Mayor Ken Wagner.

Officials with Baldwin City and Douglas County Rural Water District No. 4 both confirmed that they have begun having serious discussions with a group that hopes to start a new wholesale water district that would use the water plant and water rights associated with the former Sunflower Army Ammunition Plant near De Soto.

The impact to Lawrence residents could be significant because the large wholesale water users are helping the city pay for an already-completed $14 million expansion of the city’s Clinton Water Treatment Plant. Without the large water users, city residents alone would pay for the plant upgrade.

“I don’t want to lose those customers,” Lawrence Mayor Rob Chestnut said. “We need to look at whether we can sharpen our pencils a little bit. If those communities have cheaper options, I suspect they will go to them.”

Double-digit increases

Leaders with Baldwin City and Rural Water District No. 4 — which covers an area north of Baldwin City — said the city’s pencil hasn’t been too sharp lately.

The wholesale water rates that the city charges to the two groups increased by 16 percent in 2009 and will increase by nearly 18 percent in 2010. The wholesale rates for the past two years have been increasing at a rate that is more than double the normal increases that Lawrence residents have experienced for their water bills.

“The increases are just too large,” Wagner said.

But Lawrence City Manager David Corliss said he thinks the rates are reasonable given the quality of service the communities receive and the amount of expense that is involved in operating a water treatment plant.

“One of the things water districts will have to look at is the significant costs of operating a water treatment plant,” Corliss said. “It is a complicated, sophisticated and expensive business.”

Corliss said the city uses a formula to establish its rates that takes into account the cost of treatment chemicals, personnel, energy and maintenance costs. The city also expects to receive a certain rate of return — or in the business world, a profit — on the sale of water. Corliss said in past years the city has adjusted its expectations for a rate of return upward. He estimated the city now has an expectation of an 8 percent to a 10 percent rate of return on its wholesale water sales.

The increased expectations come at a time when Lawrence water rates have been under other pressures. Shortly after the city began its expansion of the Clinton Water Treatment Plant, the rate of housing growth began to slow significantly as the national housing bubble began to deflate. The amount of water residents used also began to slow as several wet summers led to less lawn watering. In 2010, the water rates Lawrence charges its residents is expected to increase by about 8 percent to 10 percent.

Earlier this year, Chestnut told staff members he had concerns that the rates Lawrence charges its residents would soon become uncompetitive with surrounding communities. This week, he said the city also needs to spend time reviewing its wholesale rates.

“Wholesale water users have other options, so we have to be competitive,” Chestnut said. “I don’t think that has been a primary focus here up until recently.”

Large users

In terms of total water, losing the Baldwin City business would be the biggest blow. Based on 2008 totals, Baldwin City is the second largest water customer in Lawrence’s system. Baldwin City used 224.1 million gallons of water, trailing only Kansas University in terms of usage. Baldwin City’s total is high, in part, because it turns around and sells some of the water to Wellsville and Edgerton.

Rural Water District No. 4 was the sixth-largest water user in 2008, using 54 million gallons. Douglas County Rural Water District No. 5 was the fourth-largest water user. That district has been exploring creating a new wholesale water district with Douglas County Rural Water District No. 2 and Osage County Rural Water District No. 5. They recently have begun drilling test wells in the Kansas River valley between Eudora and Lawrence. RWD No. 5 did sign a new water contract with Lawrence earlier this year, but the contract gives the district the ability to get much of its water from another provider.

Corliss said the city is willing to have discussions with its wholesale water users about how the city’s wholesale rates are structured. But he also said it is too early to assume that a new wholesale water district will be formed at the former Sunflower plant.

“This has been talked about off-and-on for a long time,” Corliss said of a major water provider forming at Sunflower.

Competition’s feasibility

But Scott Schultz, the administrator for RWD No. 4, believes the project is more advanced than in the past. A draft feasibility study has been completed by De Soto, Gardner and Johnson County Water Districts Nos. 6 and 7. A final study is expected to be released this month.

The draft study, Schultz said, projected the district could provide water to RWD No. 4 at a rate of $3.13 per thousand gallons, or about 70 cents cheaper than what Lawrence will charge the district in 2010.

Schultz also is optimistic that a change to a Sunflower plant would not take much new infrastructure on the water district’s part because one of the main lines proposed to be used by the Sunflower district already runs near a RWD No. 4 line.

“The engineering company that put together the feasibility study has a good reputation,” Schultz said. “I take comfort in the fact that they are projecting it as a reasonable option.”

Schultz and Wagner both said they thought decisions would start being made on whether to move ahead with a new wholesale water district in the next six months to a year. But neither group likely would stop buying Lawrence water in the near term. Both groups have water contracts with Lawrence that run until about 2015, but they said now is the time to begin planning for any change.

Schultz said he believes his board will take a serious look at change.

“It will be a business decision that just comes down to the cost of water,” he said. “If the price escalation from Lawrence exceeds the price we can get elsewhere, the board will have no choice but be serious about it.”

Comments

Torch 4 years, 10 months ago

8 to 10 percent is a pretty big profit margin for a commodity business isn't it? I know several large defense contractors who set their profits at 6 percent.

Not sure but it is good to see the city taking a look at other options. Being held hostage by another city isn't cool.

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beevo 4 years, 10 months ago

I would like to congratulate Baldwin City Mayor Ken Wagner. He and RWD 4 it appears are letting the City of Lawrence know “enough is enough”. When the article quoted Mayor Wagner saying, “The increases are just too large” I almost cheered. This proactive effort, to help reduce our city’s spending, could help the economic dilemma of our community. If Lawrence won’t reduce the wholesale water rates I hope our city will take a different course of action. Why should Baldwin be subsidizing the City of Lawrence for a commodity we can possibly secure cheaper elsewhere? It might be that Lawrence needs us more than we need their expensive water.

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alterego 4 years, 10 months ago

This is exactly what our mayor should be doing. Keep the pressure on the Corliss and let the powers in Lawrence know that we aren't a bunch of small town mindless stooges who will pay for the years of inefficiencies in Lawrence City Hall. Did they really think we'd just roll over and take this without a fight? Perhaps they will see that we actually have some folks at the helm here in Baldwin and RWD 4 who have a brain and a spine. As a taxpayer in Baldwin I am pleased to see our mayor take a stand and start looking at alternatives. Keep it up!

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rateraiser 4 years, 10 months ago

Glad to see the city council standing up to Lawrence, but let us not forget. I agree that a rate of return of 8-10% on water is extremely ridiculous, but I can only imagine what Baldwin's rate of return is. Here is some data from a previous post (the wholesale costs were from '07 or 08' though)

1.Baldwin purchases water from Lawrence, which charges $2.80/1,000 gallons.

2.Lawrence residents pay $2.92/1,000 gallons or .00292/gallon. I believe the base is $2.65

3.Baldwin residents pay $9.621/1,000 gallons or .00962/gallon. Base fee of $6.50.

1.Wellsville gets their water from us(baldwin), or essentially Lawrence. -by code Baldwin charges them $2.80/1,000 gallons for water, the same price Lawrence charges us.

-Wellsville residents pay $4.88/1,000 gallons or .00488/gallon. Base fee of $6.42.

1.My water bill in Lawrence would be $42.18 and $60.57 in wellsville.

2.I know baldwin charges by the cubic foot, but i converted it to gallons so it could be compared to Wellsville and Lawrence. 1 cubic foot=7.48 gallons

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SpeaksSlowlyToIdiots 4 years, 10 months ago

It's absolutely flippin' impossible to get ahead of the idiots on this forum. Here's the identical same post by indasky, who now goes by the moniker rateraiser. I'll save you the trouble of the rebuttals if you just follow the thread forward from indasky's lunatic rantings:

http://signal.baldwincity.com/weblogs/vote-no-on-the-sales-tax-nov-3/2009/oct/20/cant-support-either-sales-tax/#c5769

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rateraiser 4 years, 10 months ago

SpeaksSlowlytoidiots....you are a complete idiot....I am in no way associated with indasky. As indasky stated in the post you have linked, his info was from a post from "brandon" from back in 2008. At that time all the information was correct because it came directly from the officials at the local governments contacted and city code. As I state above the cost are from previous years. Any person with common sense would come to the conlclusion that all those prices would have increased somewhat, but stayed proportionately the same for the most part. So save yourself some trouble and get your facts straight and follow the original link:

http://signal.baldwincity.com/weblogs/water-the-heck/2008/aug/15/water-cost/

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bruceanderson01 4 years, 10 months ago

Congrats to the city for looking at other options. It looks as though it might be time to put a plug in Lawrence's spillover rates.

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SpeaksSlowlyToIdiots 4 years, 10 months ago

Well, rateraiser, then we are all left to conclude that:

1.) You are intellectually lazy 2.) You are a plagiarist. 3.) You don't have enough good sense to at least steal correct facts.

Nice work.

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alterego 4 years, 10 months ago

Have you seen today's LJW (Tuesday)? These guys in Lawrence are crazy. While they are hatching a plot to stick us in Baldwin with exorbinant water rates to fund their excesses they are proposing doubling bonuses for Lawrence city employees!! Unbelievable. I am beginning to appreciate our mayor and city council more and more. We are not the stupid little country folk who don't see what kind of game Lawrence is playing.

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NanCrisp 4 years, 10 months ago

e-x-o-r-b-i-t-a-n-t

Here's a neat trick for posters who want to use words they don't know how to spell:

In your Google field, type "define exorbinant" (or other word; just use the spelling you think is correct). Hit Enter. At the top of your search list, you will likely see something like this: "did you mean define exorbitant?" Bingo! There is your correct spelling. And you've just increased your vocabulary and, hence, your literacy rating.

You may now carry on debating whether Lawrence is ripping us off more than or less than our own city government.

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kermit 4 years, 10 months ago

Nancy---theonlygreyghost described you perfectly as the Queen B and the "b" doesn't stand for "bee".

Do you ever get tired of being so damned s-a-n-c-t-i-m-o-n-i-o-u-s?

p-e-d-a-n-t-i-c--another relevant adjective

and my all time favorite

p-u-n-c-t-i-l-i-o-u-s

Recognize yourself?

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Bloggerboo 4 years, 10 months ago

Haha, Kermit! Way to go. This is Nan's serious contribution to this topic? Belittling someone for a typo. God, Nan, you must spend all day writing letters to the editor that never get published because the Signal is always full of typos. Posters on Speakout! are not journalists and are definitely let off the hook much more quickly for typos and even spelling errors.

G-e-t o-v-e-r y-o-u-r-s-e-l-f.

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NanCrisp 4 years, 10 months ago

alterego:

I apologize for singling you out in regard to misspellings which are rampant here and everywhere. It was born of the extreme frustration of another blog/thread in which multiple posters blogged about "making due."

As for Kermit and Bloggerboo: you only get what you deserve. Spelling matters quite a lot, whether you are a journalist, or a teacher, or for that matter a person who likes to squelch commentary.

As for my serious contribution to this topic, you apparently missed it, so I will repeat: "You may now carry on debating whether Lawrence is ripping us off more than or less than our own city government." In other words: the point is moot.

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Bloggerboo 4 years, 10 months ago

Nan,

You have a high opinion of yourself.

Bloggerboo

P.S. I have never misspelled anything on this forum. But, I have made a typo, much like alterego above. It was nothing more than a simple mistake that didn't impact the meaning of his/her statement at all.

P.S.S As for your serious contribution to this subject, since we are all pretty tired of your holier-than-thou attitude, I say, take your serious contribution and don't bother next time.

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alterego 4 years, 10 months ago

This is a tough crowd. I thought the purpose of this forum was for all of us to give our opinions not be criticized for spelling, grammatical or typographical errors. This kind of scrutiny will only discourage discussion and makes me wonder if this kind of educational bullying isn't a way in NanCrisp's own words "squelch commentary".

Luckily I am not easily intimidated and will hang on for a while and see where this forum goes. As for NanCrisp-- I will accept your apology but suggest you kindly refrain from trying to humiliate people. You often have interesting points to make but you have lost your audience and your persuasive powers when everyone dislikes you not for your legitimate opinions but for your overbearing style. Just saying........

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