Archive for Thursday, October 4, 2007

City eyes possible yearly $3 million in utility revenue

October 4, 2007

When city or economic development officials talk about possible industrial development they usually talk in terms of jobs created. The possible Huhtamaki Americas expansion in De Soto would mean another 100 jobs for the plant, but what really has local officials rubbing their hands is what the expansion would mean for city utilities.

The manufacturing process proposed for the expansion would make Huhtamaki a huge customer of city utilities, helping spare current customers the burden of paying for current and future city water and sewer improvements. The more than $30 million the expansion would mean for the city could expand services to its growth areas.

Mayor Dave Anderson said the manufacturing process proposed for the expansion would require 1 million gallons of water of day. That would equal $2.2 million a year in revenue for the city.

And because what leaves the tap must ultimately go down the drain, the expansion also would enhance the wastewater department's revenue. At the 1 million gallon a day water rate, the expansion would provide the city an estimated $840,000 a year in sewer revenue.

And although the city doesn't sell electricity, it also would benefit from the Huhtamaki's increased use of power. City Administrator Pat Guilfoyle said discussions with WestStar Energy indicate the city would earn more than $400,000 annually from the franchise fee on the sale of electricity, which would be available to the city's general fund.

In addition to being a big customer, Huhtamaki would be an "ideal" customer, city engineer Mike Brungardt said. The proposed Huhtamaki expansion wouldn't require an expensive waterline installation and could be serviced from one tap, he said.

Furthermore, the water use would be remarkably consistent, sparing the city from large peak water production cycles, Brungardt said.

The water going down drains from the manufacturing process would be easier to treat than household sewage, Brungardt said.

Should Huhtamaki choose De Soto for the expansion, the city would double the capacity of the new West Bottoms wastewater plant, city officials said. That would allow it to serve up to 3,000 acres of the Sunflower Army Ammunition Plant.

The added revenue from the Huhtamaki expansion would also allow the city to install wastewater mains to areas not now served by the city sewer system, Brungardt said. That could open up Lexington Avenue south of Kansas Highway 10 and the Edgerton Road/K-10 intersection to development.

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