Baldwin City Council hears presentation on proposed Sunflower water cooperative
An engineer with the firm hired to perform a feasibility study on a proposed water cooperative told the Baldwin City Council on Monday it appeared the city could purchase water from that source at about the same rate it was currently pays.
Tony O’Malley of the Larkin Group gave the council a briefing on a feasibility study reviewing Baldwin City, De Soto, Wellsville and Douglas Country Rural Water District No. 4 purchasing water from the jointly owned water treatment plant on the closed Sunflower Army Ammunition Plant. The four jurisdictions and equal voting members in the Sunflower Public Water Utility Authority paid for the feasibility, which the authority’s board approved last month.
The study found $16.7 million in improvements were needed for the Sunflower plant and its well field to supply all four jurisdictions, although De Soto has already made some of the upgrades. About half of that cost would be for a distribution line that would connect the Sunflower plant to Baldwin City’s pump station about 6 miles north of the city.
The arduous task of securing the easements for that nearly 16-mile-long water distribution line would prevent the Sunflower authority from supplying Baldwin City and Wellsville with water before 2015, O’Malley said.
The study recommends a less direct route to the pump station that makes use of a new De Soto water line to the north because it offered opportunities for increase water sales in the future to Douglas County RWD No. 4 and Eudora, O’Malley said.
Water from the plant would cost the jurisdictions from $$3.56 to $4.21 per 1,000 gallons in 2015, depending on how the needed improvements were financed and how much the water plant’s current owner, De Soto, would be compensated for the treatment plant and well fields, easements and leases that go with it.
All debt would be retired with the only income available to the authority, the sale of water. O’Malley said financing options being considered were 30-year revenue bonds, a combination of revenue bonds and the use of a state revolving fund —which would have a lower rate but only a 20-year term — and a final option that would increase revenue bond payments as debt was retired.
O’Malley said that range was not that much different from the $3.83 Baldwin City currently pays Lawrence for 1,000 gallons of water.
The four jurisdictions would enjoy a number of advantages as members of the utility, O’Malley said. Among those advantages were:
• The utility would not go into direct competition with Baldwin City for retail customers.
• There would be no rate of return paid to a middleman or supplier.
• The portion of water rates dedicated to funding future maintenance or improvements would directly benefit the utility.
• The utility’s one member/one vote and equal water rate organizational structure.
• Cost control from the ability to control future expansion based on growth.
Benefits particular to Baldwin included:
• Ending the purchase of water from Clinton Lake and the cost increases that are coming from that source to pay for expensive maintenance of Kansas reservoirs.
• The Sunflower utility’s connection to the Baldwin City pump station would end the city’s need to maintain the problematic water line through the Baker Wetlands.
At the conclusion of O’Malley’s presentation, Councilman Shane Starkey said the Sunflower authority would seem to benefit the city in the long run because the control it would give the city in establishing water rates. But, he wondered what it would mean in the short term.
That, O’Malley said, would depend on what Baldwin City could negotiate with its other option for future water supply, the city of Lawrence. But O’Malley, city public works director Bill Winegar and City Administrator Chris Lowe said water from Lawrence would increase regardless of any agreement the city negotiated with Lawrence.
The reason is the Kansas Water Office’s fee for lake water use. Currently, Baldwin City’s current contract with the state requires a 10-cent payment for every 1,000 gallons taken from the lake. When the city’s contract with the state expires in 2025, the rate could increase to as much as a $1 per 1,000, Winegar said.
“Bottom line, water rates are going to increase with either option,” Lowe said.
The authority board has asked Baldwin City to make a decision about joining water utility in the next 60 days. As part of that process, the council will have its own independent review of the feasibility study’s findings.