Archive for Wednesday, November 21, 2001

De Soto City Council approves 33-percent water rate increase

November 21, 2001

At the urging of Mayor David Anderson, the De Soto City Council Thursday approved a 2002 water-rate schedule that will raise rates 33 percent and provide the water department the revenue it needs to pay its bills.

The new rate schedule also ends the city's practice of awarding lower rates to high-volume customers. It establishes a flat rate for all city water customers of 43 cents per 100 gallons with a minimum base-rate of $13.

The rate change will increase the monthly water bill of the city's smallest water users by $3 and that of its biggest customer, Clearview City, by $2,573.

The council chose the new rate schedule from a blizzard of alternatives city engineer Mike Brungardt developed. He presented the council with three basic alternative with four different options each.

The three basic alternatives were designed to:

Provide the water department the 10-percent additional revenue written into the 2002 budget.

Provide the 33 percent additional revenue needed to break even and end the practice of subsidizing the utility with monies from other departments or funds.

Break even and pay back the $150,000 the city council will borrow from the utility reserve account so that the water department can pay its 2001 expense and build up a needed operating capital reserve for 2002.

City Administrator Gerald Cooper proposed the council adopt the budgeted 10-percent rate increase. He suggested the council delay increasing rates that addressed the water department's budget shortfall or its debt until next summer's budget discussion.

"That (10 percent) is what residents are expecting," he said. "The budget is your main policy statement to the public about where you put priorities. An issue this dramatic should be dealt with as a whole budget item, not as a rate change.

As for the water department's debt, Cooper suggested the council "string out" the repayment over a number of years to reduce the effect on water rates.

Anderson held out for a more aggressive approach. At a minimum, the council should end the practice of subsidizing the water department, he said. He suggested the council look at repaying the recently borrowed $150,000 in 2002.

"I'm going where no man has gone before," he said. "We are running $150,000 in debt. We need to show we're serious."

The council was willing to heed Anderson's call to end the subsidy.

"If we're going to be in the water business, we need a rate structure that supports our expenses," Linda Zindler said.

Fellow council member Emil Urbanek said residents realize they won't get the quality water they want unless they pay for it.

"I think we have to make an effort to not borrow $100,000 again," he said.

Only council member John Taylor expressed reservations, saying low-income customers would be hurt by the rate increase. He said he wouldn't support a rate change that didn't address the inequities built into the city's current rate structure.

Under the city's current rate structure, the city's smallest customers pay a base charge of $10 a month. The fee decreases to 38 cents per 100 gallons for those using 1,501 to 4,500 gallons a month, 34 cents per 100 gallons for customers using 4,501 to 10,000 gallons a month and 26.5 cents per 100 gallons for customers using 10,001 gallons or more a month.

The resolution adopted 4-0 last Thursday (Tim Maniez was absent because of an illness in the family) will put an end to that declining scale in January.

In another water-related issue, the council acted to take advantage of a bargain bid to construct the new 12-inch water line connecting the water plant on the former Sunflower Army Ammunition Plant with De Soto. Brungardt told the council he received a bid from BRB Construction of Topeka to install the waterline for $320,000.

The quote was $180,000 less than estimated. Brungardt explained BRB wanted the job to fill its usual winter down time. The council instructed the city engineer to negotiate with the company and present the bid package at a special meeting set for 5:30 p.m. Nov. 29 at City Hall.

At that same meeting, the council will make application for a $750,000 short-term loan available through a state program.

The money will be used to pay for the water line and bring heat and electricity to the Sunflower water plant now that the Army is shutting down the gas and power lines within the plant.

Brungardt said he is still developing estimates on the cost of bringing utilities to the water plant.

Meanwhile, Brungardt and City Attorney Patrick Reavey said they have received assurances the city will receive the needed easement for the water line.

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