New developments would pay greater share of costs associated with Lawrence growth.
A plan to raise water and sewer rates and increase connection fees would spread the cost of operating the city's utility system more fairly, according to engineers who devised the plan.
J. Rowe McKinley of Black and Veatch Corp. told Lawrence city commissioners that the plan would protect existing customers from paying for costs associated with new growth on the city's edges, and it would spread all costs among different classes of customers according to how much demand they place on the system.
The net effect of the new rate plan would be a 16 percent increase in the combined cost of water and sewer service over the next five years for a typical single-family home. Additional costs, however, would be charged to new homes and businesses that hook onto the system later, as well as rural residents who hire private waste haulers to clean out their septic tanks and empty the waste directly into the city's sewage treatment plant.
In fact, over the course of a year, the cost of emptying septic tank waste into the treatment plant would be roughly equal to the cost of being on a city sewer, McKinley said.
McKinley said the rate study looked at the future needs of the water and sewer utilities and how much money the city would need to produce from utility bills to cover the cost of ongoing operations plus future expansions and upgrades.
Over the next five years, he said, the city plans to spend $44 million to upgrade and expand the water system, and an additional $92 million on improvements to the sewer system.
Those include a $37 million expansion of the sewage treatment plant, slated to begin next year, as well as a $12 million expansion to the Clinton Lake water treatment plant.
Much of that cost is associated with the city's high growth rate, which has been averaging about 2 percent each year, McKinley said, but some of the cost also stems from the need to replace old lines and equipment, and to comply with new environmental regulations.
The plan calls for no increase in the city's water utility rates over the next five years, but it would increase sewer rates by 6 percent each year over the next five years.
It also would increase the cost of new connections to the water and sewer system from $735 currently to $1,010 next year, and eventually to $1,150 by 2004.
Those fees, McKinley said, include not only the cost of extending service to new areas, but also the cost of "buying in" to the equity already built up in the city's water and sewer systems, which have been financed over the years by the city's existing customers.
Commissioners accepted the report Tuesday night and directed the legal department to draft ordinances that would put in place the new rate structure and connection fees. That means members of the public would have at least two more chances to comment on the plan when the ordinances are heard on first and second reading.
But commissioners deferred immediate action on the new septic fees. Instead, they directed Mayor Erv Hodges to enter talks with Douglas County on a plan that would soften the impact on rural customers if the county would pay for the new septic disposal equipment at the sewage treatment plant.
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