Daily Archives: Feb. 28, 2012

Wichita council looking ahead to more increases in water and sewer rates

As they did last year, water and sewer rates will be going up for years to come.

The only real question is how much, and how will the increases be spread over time.

That’s the final analysis after a City Council workshop today that was called to try to get ahead of future water and sewer needs.

City utility staff presented the council with eight alternatives for water and sewer rates. All hiked rates over the next 10 years.

The most plausible scenarios call for increasing water and sewer revenue by $65 million to $78 million over that period.

All those alternatives include money for inflation costs, repair and replacement of aging equipment, plus some money for expansion to handle future anticipated growth.

City staffers acknowledged that some of the scenarios aren’t realistic, but were put out for discussion so council members could see how certain expenses affect overall costs.

The minimalist approach would cost only about $11.5 million in rate hikes over 10 years — enough money to cover inflation of current expenses but not much else.

On the up side, it would mean no water rate hikes for seven of the 10 years and no sewer rate hikes for six.

However, that plan would include no capital upgrades to replace aging equipment and make no accommodation for growth. It would “result in major increases in the number of water main breaks and sewage backups due to not investing in existing infrastructure,” according to the staff report.

At the other end of the spectrum is a plan that would accommodate inflation, improve the existing system, and provide $227 million for projects aimed at future growth.

The downside there is that it would require substantial rate increases every year, hiking rates a total of nearly 70 percent by 2022.

The plan the council ultimately selects will undoubtedly fall somewhere between those two extremes.

One scenario that is likely to get a lot of consideration is a plan to accommodate upgrades and growth, while assuming a 3 percent reduction in operating costs due to increased efficiency.

That plan starts with a 6.8 percent rate hike in 2013, tapering down to a 3.8 percent annual hike at the end of 10 years. The overall 10-year increase would be 64.3 percent.

Officials also expressed interest in a scenario where the city gambles on development not picking up for a while. That plan pushes growth-related water and sewer projects back by two years.

That plan would have a slightly smaller rate increase than the scenario where operating expenses are reduced. The total 10-year rate increase would be 63.2 percent.

One wild card that caused some dissent in the meeting is the cost of complying with expected future Environmental Protection Agency regulations on the quality of water discharged from sewage treatment systems.

Public Works Director Alan King said deepending on how much phosphorus and nitrogen the EPA decides to allow in wastewater, the cost of building new treatment facilities could be anywhere from $101 million to $146 million for Wichita – plus operating costs from $980,000 to $1.8 million a year.

In a redux of the an earlier council debate on water quality in storm runoff, council member Michael O’Donnell said he opposes spending money to meet “intrusive and overbearing EPA standards.”

City Manager Robert Layton replied that the city is planning around the “worst case scenario” – meaning the strictest and costliest EPA standards – “so we don’t caught short, because the whole idea is to get (rate) predictability.”

Layton also said the effluent regulations will offer considerably less “room for maneuvering” than stormwater regulations.

“Every city in the United States will have to adhere to this,” Layton said.

O’Donnell however, said he doesn’t believe all communities will have to comply.

“Certain cities, small cities just couldn’t afford it,” he said. “I believe our congressman is fighting against a lot of these mandates right now.”

There was some good news for the water and sewer system.

King told the council the city has saved $3.7 million in the water department and $5.6 in sewer through restructuring of debt.

In addition, he said, the city made $9.5 million more than it expected last year, because of increased use of irrigation during the hot, dry summer.

The additional $18.8 million was calculated in to the scenarios presented to the council, he said.

The council isn’t expected to take any immediate action on water and sewer rates, which were just raised in December.

A timeline distributed to the council projects having “community dialogue” on rates in August through October and council deliberations in November, leading up to final December decision on next year’s rates.

 

 

 

O’Donnell apologizes to council over campaign e-mail flap

Wichita City Council member Michael O’Donnell apologized today to his council colleagues for using his city e-mail to campaign for a friend seeking re-election to the state Senate.

“It was my sloppy and honest mistake, and I am sorry,” he said at the start of a council workshop meeting.

O’Donnell is facing a March 21 hearing at the Kansas Governmental Ethics Commission in connection with the incident.

“I will fully cooperate with the Ethics Commission and look forward to resolving this issue and moving forward civilly and in good faith,” O’Donnell said.

Mayor Carl Brewer said he appreciated O’Donnell’s apology and accepted it on behalf of the council.

“It takes a big person to apologize,” the mayor said, adding that he thinks O’Donnell set an example for politicians at the local, state and federal levels.

O’Donnell has admitted he used his city computer to solicit financial sponsors for an Oct. 30, 2011, meet-and-greet on behalf of state Sen. Garrett Love, R-Montezuma. O’Donnell sent the e-mail to 39 individuals.

State law prohibits using any public resources for campaigns for elective office, according to Carol Williams, executive director of the Ethics Commission.

The commission can levy a fine of as much as $5,000 for a violation of the state’s Campaign Finance Act. In practice, the commission has seldom levied heavy fines for first-time violations.

O’Donnell’s contrition today is a marked contrast to his earlier comments on the matter.

He had previously called the matter “a political hit job” by some of his council colleagues, including Brewer, to try to still his conservative voice on the council.

O’Donnell is often the sole dissenter on spending matters.

He is a staunch opponent of a plan by the council to help finance development of a downtown boutique hotel by allowing the developer to keep a portion of the hotel’s guest tax, estimated to be a $2.25 million benefit over the next 15 years.

A ballot measure challenging the council’s decision is up for a public vote today.

A “yes” vote will allow the Ambassador Hotel developer to keep the tax money and a “no” vote would overturn the council’s decision and deny the developer the tax rebate.

After the meeting, Brewer said he doesn’t have any hard feelings over O’Donnell’s initial criticism of him.

“I don’t worry about that,” Brewer said. “It’s part of what comes along with my job, and these (council members’) jobs too.”