Archive for Thursday, October 18, 2012

Lawrence City Commission extend water agreement with Baldwin City

Baldwin City Hall

Baldwin City Hall

October 18, 2012

Lawrence city commissioners extended the city’s current water agreement with Baldwin City and made rate concessions the customer demanded.

Lawrence commissioners unanimously approved Tuesday a 40-year contract extension ensuring the sale of water to Baldwin City, which is Lawrence’s second-largest water customer.

The contract provides new price breaks to Baldwin City after the leaders in that community objected to double-digit rate increases for the millions of gallons that Baldwin City buys from the Lawrence. The new rate will charge Baldwin City a wholesale water rate of $2.91 per 1,000 gallons, which is about 25 percent below the current rate.

Lawrence City Manager David Corliss said the large rate reduction recognized the wholesale water market has become more competitive, as new wholesale water districts have been formed and plans are being explored to restart a wholesale water plant on the former Sunflower Army Ammunition Plant near De Soto.

“We think it is a healthy price reduction that follows our philosophy that we want to provide an appropriate wholesale price to one of our larger customers,” Corliss said. “We know Baldwin City has options, and we know they have been exploring other options.”

Baldwin City Administrator Chris Lowe said tying wholesale water rates to those Lawrence charged its city customers was a demand of Baldwin City Council members. But he said the city was still exploring joining a wholesale water district using water produced at a water plant on the closed Sunflower Army Ammunition Plant.

“There is nothing in the agreement that precludes us from going a different way,” he said.

The new contract states any future rate increases must be no larger than the rate increase Lawrence city commissioners approve for the average residential customer in Lawrence. Increasing water rates has proved politically difficult recently in Lawrence.

City commissioners, in fact, still have not settled on what water and sewer rates will be for Lawrence residents in 2013. But residents shouldn’t expect a reduction.

Baldwin City in 2011 purchased 195.5 million gallons of treated water from Lawrence, making it the second-largest purchaser of Lawrence water behind Kansas University. Baldwin, however, actually owns the rights for the water it purchases from Lawrence, although the new contract also gives Baldwin City an option to purchase water held under rights by the city of Lawrence, if needed.

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 the four jurisdictions with water. The board includes a representative of the water plant’s surrounding property owner, Sunflower Redevelopment LLC.

The board, led by Chairman Bill Winegar, Baldwin City public works director, released the feasibility study in January. The study’s findings were sketched around important unanswered details, such as how needed improvements will be financed and for how long, and how much De Soto should be paid for the value of the plant, easements, water towers and well field it received as one of the public benefit transfers that accompanied the Army’s transfer of the closed ammunition plant to Sunflower Redevelopment L.C.C. in 2005.

But much of the framework of the future Sunflower Public Water Utility Authority has been established. The three cities and the rural water district would be equal voting partners in the authority. The study identifies about $15.2 million in needed improvements at the plant, the well field along the Kansas River west of De Soto and a distribution main that would deliver water from Sunflower to Baldwin City’s pump station six miles north of the city. Those improvements would be paid for with either revenue bonds or a combination of revenue bonds and state revolving loan funds retired from the sale of water to the four voting members.

A feasibility study found that the Sunflower plant could produce water at a cost of from $3.60 to $4.20 per 1,000 gallons, depending on how those undecided details are resolved. It concludes: “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.”

Earlier this year, the council agreed to have its financial consultant, Springsted Inc., review those numbers. That review has not been presented to the council.

Lawrence Journal World reporter Chad Lawhorn, clawhorn@theworldco.info, contributed to this story.

Earlier this year, the council agreed to have its financial consultant, Springsted Inc., review those numbers. That review has not been presented to the council.

Lawrence Journal World reporter Chad Lawhorn, clawhorn@theworldco.info, contributed to this story.

Comments

1776attorney 1 year, 10 months ago

This should result in a 25% reduction in water rates to Baldwin City residential and commercial customers for some of the highest water fees in the state.

I hope this is forthcoming and announced from the city council next month before a ratepayer revolt is considered.

What usually happens in these cases is local governments pocket the savings and spending the savings on other unnecessary pet projects after a lot of phony and dishonest excuses.

While there are fixed costs in the purchase, processing and delivery of water, we now all know that the main ingredient (water) costs 25% less.

There will be no legitimate excuse for this not happening.

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Stacy Napier 1 year, 10 months ago

Sure there is. I would guess they will use the savings to upgrade to windows 8 for all the billing computers and to get a faster readers for the meters, ect........

It is always something with this town that must be better. Of course it is never the streets or sidewalks that get improved.

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