City Manager Robert Layton said that as he was assembling possible solutions to the city water utility’s dire financial situation, he considered borrowing money from the city’s self-insurance funds.
But he decided against it because of the potential for unexpectedly high insurance claims to lead to yet more problems. “We could put ourselves in jeopardy,” he said today.
For example, City Finance Director Kelly Carpenter said the city is about to report that the July hailstorm led to roughly $4 million in claims.
Many have also suggested that the city put off or cancel other major projects such as the proposed new airport terminal, which is being designed, and the proposed new downtown library, which is nearing design.
Those ideas are being examined, according to Vice Mayor Jim Skelton, who wants Layton to explore deferring the library project or taking an across the board 2 percent cut to all city services or tap reserve funds. But Layton and Carpenter said that might not work — or at least not bring the city all the way out of the financial mess they’re facing. The city can’t transfer funds to the utility to cover debt payments because of bonding covenants, they said. But everyone seems to acknowledge that with little time, the city will have to very quickly explore alternatives or approve the rate hike.
“We can find another way,” Skelton said. He, Mayor Carl Brewer and other council members have acknowledged the anger the water finance fiasco is creating. “It doesn’t take a rocket scientist to say ‘we screwed up and now we have to pay for it,’” Skelton said.
City Council members will probably discuss the 15 percent increase in April and vote on it — or an alternative — in May. (Votes on a request for proposals for consultants to reexamine projects and manage the utility temporarily will come in the April 6 meeting.)
Layton said the city may considering removing the aquifer recharge project from the water utility and treat it like other major projects that are paid for by property taxes. “It may be one of the things that keeps us from doing double digit increases over the next few years,” he said. But it’s unclear how that might work since it’s not just Wichita benefiting from the project — it’s seen as a major water source for the entire region.