Council approves extension of Lawrence water contract
After the Baldwin City Council approved Monday a 40-year extension of the city’s contract to purchase water from Lawrence at a much lower price, one councilman said he wanted to pass the savings on to customers.
The contract, which the Lawrence City Commission already approved, immediately reduces Baldwin City’s wholesale water rate to $2.91 per 1,000 gallons, a decrease of about 25 percent.
It also ties future water rate increases to those passed on to the city of Lawrence’s larger water customers.
That later provision was a condition the Baldwin City Council demanded be part of any extension of the contract that was set to expire in 2017. It was the view of Baldwin City officials and council members that past steep Lawrence water rate increases were arbitrary and helped pay for infrastructure not associated with producing or delivering water to Baldwin City.
After the 5-0 vote to approve the contract extension, Councilman Tom Farmer suggested customers’ water rates should reflect the city’s lower cost of water.
“That’s a big decrease,” he said. “I would like to see some of that go back to customers.”
Mayor Ken Wagner said he and City Administrator Chris Lowe had talked about that issue and promised there would be further discussion about water rates in soon.
That discussion would consider the health of the water utility fund, which had to be supplemented last year with money from the city’s reserve, and such things as the amount of reserve the council would like to have in the fund, Lowe said.
Whatever happens with that issue, Baldwin City customers can be confident the new agreement would end rate hikes necessitated by steep increases in the wholesale water rate Lawrence charges, Wagner said. That was at the core of the city’s search for other water sources, including membership in a wholesale water district supplied by the water treatment plant as the closed Sunflower Army Ammunition Plant near De Soto.
“I said all along, the quality of water (from Lawrence) was exceptional,” Wagner told an audience that included Lawrence City Manager Dave Corliss. “The quantity of water was never an issue. The problem we had was the rate of the rate increases coming from the city of Lawrence.”
Lowe said the discussions with Lawrence were “collegial.” The negotiation produced an agreement that gave Baldwin City a fair water rate and gave Lawrence the assurance its second-largest customer would continue to help it pay for infrastructure improvements.
Corliss said the fact that much of water production and delivery infrastructure improvements needed to supply Baldwin City “were in the rearview mirror” would help stabilize rates. He noted the contract didn’t prevent Baldwin City from getting water elsewhere, but the goal was to keep rates low enough to discourage any such move.
In 2011, Baldwin City joined the Sunflower Public Water Utility Authority with Douglas County Rural Water District No. 4 and the cities of De Soto and Wellsville. After they formed a board, the four jurisdictions each anted up $11,400 for a feasibility study on using the Sunflower treatment plant to supply all with water.
That study concluded: “It appears that we can expect the cost of water to be in the neighborhood of $4 per 1,000 gallons once the SPWUA begins paying debt service on the financing in 2015.”
Lowe said Monday some of the factors that would determine the wholesale district’s final rate were still being studied, and Baldwin City would continue to be a part of those discussions. But he added that, realistically, the much cheaper purchase price of wholesale water from Lawrence appeared to make it the better option.
Wagner hinted at the same conclusion, noting the new contract with Lawrence came without the need for an expensive water line the Sunflower option required.