Water drinkers, the state of Kansas has something it wants you to know: We have a really big bill to pay.

State water officials are quickly realizing they need to begin accumulating tens of millions of dollars to meet decades-old obligations to the federal government to help pay for reservoirs – such as Clinton Lake – that are used to store future drinking water supplies.

“We have some concerns right now,” said Cheryl Buttenhoff, a public service administrator in the Kansas Water Marketing Program.

So do Lawrence leaders, who fear the state will begin charging cities and rural water districts that use water from the lakes higher fees that ultimately must be passed to water customers.

“I’m still trying to analyze everything, but the prices they are showing me right now really do concern me,” said Chris Stewart, the city’s interim director of utilities who oversees Lawrence’s water system.

At the heart of the issue: Those who run the marketing program – which is part of the Kansas Water Office – know that as northeast Kansas continues to grow, more water supplies will be needed.

Finding the water isn’t hard. Paying for it might be.

There’s water available in Clinton Lake and Hillsdale Lake, which is south of Kansas City in Miami County. Both lakes already are used to provide water to surrounding communities, but the lakes have the ability to provide even more.

But to do so will require the state to activate water storage contracts. And that will take money – in some cases, lots of money.

Everyone foots the bill

To access additional water in Hillsdale Lake, the state must activate a $20 million agreement that is growing more expensive each year. That’s because the contract began accruing interest shortly after the lake was built in the early 1980s. Currently, interest is accruing at the rate of about $1.5 million per year. The contract for Clinton – mainly because it was built several years earlier – is only about $2 million.

Sounds like bad news for people who need water out of Hillsdale Lake, right? Actually, it’s bad news for Lawrence and Douglas County, too. That’s because the state doesn’t break its costs out by lake. It spreads them across all members of its program, which in this area includes Lawrence, Baldwin, Lecompton, Wellsville, Edgerton and Douglas County Rural Water District No. 4. Under state law, area water users will help pay to access water at Hillsdale even though they won’t use any of it.

Just how much everyone will be asked to pay, though, isn’t yet known. Currently, the marketing program charges cities and rural water districts 12 cents for every 1,000 gallons of water used, which is passed along to customers. Preliminary plans would allow that rate to increase to 20 cents in 2007 and all the way to 85 cents by 2016.

Given that an average household uses about 10,000 gallons of water per month, the extra fees may be less than a dollar per month in the early stages of a rate increase program. But by 2016, when the rate hits its peak, the increase could amount to about $7 per month.

And those increases would be in addition to increases related to higher treatment costs and just plain inflation. For example, Lawrence water rates have been increasing by about 4 percent per year in recent years.

“It doesn’t sound very troublesome at first, but you can see that at a certain point it will cause some people to feel some pain,” said Scott Schultz, administrator for Rural Water District No. 4.

That pain also will be affected by water bills that already vary month to month. In the winter, when water usage is low, the additional fees may amount only to a few cents per month. But in the summer, when people are watering lawns and gardens, the increase could amount to more than $20 or $30 a month.

Long-term prospects

Margaret Fast, planning manager for the marketing program, said the state would be looking for options other than increasing fees. For example, the state may approach the federal government about deferring the interest payments for a period. Other states, including Oklahoma, also are seeking such help to deal with similar situations.

Whether those efforts will be successful is unknown. The U.S. Army Corps of Engineers is due the money because when it began building federal reservoirs in the state in the 1960s, it asked the state whether it wanted to help pay to make the lakes functional for large-scale drinking water storage. Without the state participation, the lakes would have been built primarily for flood-control purposes.

“We are looking at every alternative we possibly can come up with to make this program financially sound for the long-term,” Fast said. “We want to meet our obligation to the Corps and to the people who rely on these resources.”

Schultz, though, thinks many people will want to know why the state didn’t do more planning to phase the rate increases in over a longer period of time. After all, he said, the lakes have been in operation for decades and it always has been assumed that more water will be needed as population grows.

Fast said part of the reason is a simple misunderstanding of the contracts. She said state leaders did not fully understand that interest would begin accruing the moment the state began using water from each lake. State leaders were under the impression the accrual would occur in phases.

The state also thought it had some ability to increase the rates of several large contracts it signed with users early on in the program’s history. But an attorney general’s opinion has ruled those contract rates must be left at 10 cents per 1,000 gallons. Lawrence has some of those fixed-rate contracts but also has some of the newer contracts that allow for rates to be increased.