Archive for Wednesday, November 19, 2008

Lawrence’s water use — and city’s utility revenue — both declining

Funds declining despite several rate increases

November 19, 2008


As the economy continues to weaken, city leaders now say they need to turn their attention to a new source of financial concern — the city’s water and sewer operations.

The city’s latest financial report highlighted that the city’s water and sewer funds are actually seeing declining revenues, despite several years of rate increases.

“I think that is an area of the budget that is going to need some significant review,” said City Commissioner Rob Chestnut.

The report released this week showed that the city water and sewer department has seen the amount of money it has collected from ratepayers drop by 1.4 percent — or about $300,000 — during the first three quarters of the year.

City leaders are vowing to keep a close eye on the fund, in part, because 2007 also was a weak year for the water and sewer fund.

“We’re going to continue to closely monitor expenses in that fund,” City Manager David Corliss said.

But Corliss and others said they aren’t yet contemplating reopening the discussion on water and sewer rates for 2009. As part of the 2009 budget, commissioner approved a water rate increase of 12 percent, but agreed to hold sewer rates steady.

“I think that would be a last resort,” Ed Mullins, the city’s director of finance, said about possibly asking for even larger rate increases.

City residents this year were faced with a 5 percent water rate increase and a 6 percent sewer rate increase, on average. Those higher rates are why city leaders were expecting water and sewer revenues to increase, not decline.

But Mullins said two factors have led to the decline — a mild summer that didn’t require much lawn irrigation, and a dramatic slowdown in the number of new homes being built in the city.

The slowdown in housing starts is the larger concern because the city eventually expects dry Kansas summers to return. But Mullins said the city isn’t projecting housing starts to return to historical levels in the next year or so.

The growth component is important because the city already has started a multimillion-dollar expansion of its Clinton Water Treatment Plant, and has bought about 400 acres south of the Wakarusa River to build a sewer plant. The city, however, put the sewer plant project on hold after it became clear the city’s growth rate had slowed.

In other news from the city’s third quarter financial report:

• General fund expenses have increased by 3.9 percent during the first three quarters of the year. General fund revenues also have increased by 4.8 percent during the period.

• The city anticipates that general fund expenses will exceed general fund revenues by $1.5 million or less in 2008. That amount of deficit spending is actually slightly less than what commissioners had planned for when they created the 2008 budget.

• Sales tax collections are up 6 percent, or $972,000, during the first nine months of the year. Property tax collections are up 3.3 percent, or about $400,000.

• The city’s public golf course fund is operating in the black. Revenues for the golf fund are $161,100 greater than expenses. But there is one caveat. The golf fund no longer is responsible for paying the bonds used to build the golf course. Those bonds are paid out of a separate city fund.


Steve Jacob 9 years, 5 months ago

Sorry, I view less water being used as a good thing, especially less watering of the yard. The next shoe to drop for the city (and county) is when we get those property tax values letters in December.

dipweed 9 years, 5 months ago

So the City wants us to pooh pooh water conservation efforts and pray for drought?

classclown 9 years, 5 months ago

Just to let everyone know, the city monitors your water usage in December, January, and February in order to determine your sewer rates for the year. Now would be a good time to fix any leaky faucets and keep an eye on your water usage.Last year my daughter and her kids stayed with us so we used quite a bit of water. After they moved out my water usage naturally went down however my sewer fee was 4-5 times the fee for the amount of water we used. These next three months we'll be watching our water usage like a hawk.

Alexander Neighbors 9 years, 5 months ago

well if they would quit going after the yellow house owners the city would have an extra million dollars

Ann Hamil 9 years, 5 months ago

So the golf course can operate "in the black" as long as the city pays the interest on its debt?????? Gee I bet I could get way into the black if the city would just pay my mortgage. Where do I sign up for that for this creative bit of bookkeeping?

Danimal 9 years, 5 months ago

This reeks, it's too bad the forth-coming citizens tax review board will be appointed by the city commission. Shouldn't declining water usage be a good thing since it will give the city a couple more years to figure out where to place the new water treatment facility (or if it's even necessary).

gccs14r 9 years, 5 months ago

I've already cut water and electricity usage. Sounds like another round of conservation measures is in order. If they keep it up, it'll end up being cheaper to install a cistern and provide my own water from roof runoff. See how much they like losing whole customers.

tir 9 years, 5 months ago

D@mned if you use more water and sewer. Also d@mned if you use less. Shoot. I might as well waste water, since I'm going to pay more for it either way. Oh, and the DG County Treasurer sent a tax bill to my house yesterday (I have always paid taxes and insurance as part of my house payment). They also sent the tax bill to the bank that has my mortgage. When I called them in a panic they said it was a glitch, but you have to wonder ;-)

WWoftheW 9 years, 5 months ago

The issue is the city has been banking on fake numbers for years. Over building does not put money in the city coffers, but the city has been banking on development to continue to pay based on what is built. The problems is not lack of building, but lack of buying and living in all those houses and apartments out west that we paid ito build infrastructure for, but still are vacant. So over building has a two fold problem, money spent to build infrastructure and money not coming in becuase the homes and apartments are not being occupied and therefore no money coming from utilities.

rachaelisacancer 9 years, 5 months ago

I don't have a comparison for utility rates, but I do know that I consider it a little ridiculous that my utility bill is always more expensive than my gas or electric bills.

tir 9 years, 5 months ago

Heh-heh. Looks like the property tax bill mistake has made the news: almost had a coronary when I opened mine. God help me when the house is finally paid off and these little bombshells start to arrive in my mail slot twice a year!

gccs14r 9 years, 5 months ago

Yeah, $29/mo for electric, $40/mo for gas (Summer, obviously), and $70/mo for water. My cell phone bill is usually cheaper than that.

monkeyhawk 9 years, 5 months ago

The city should take into consideration how many previously occupied homes are now sitting empty because the owners either could not, or did not want to wait for their houses to sell before getting out of Lawrence.

Richard Heckler 9 years, 5 months ago

Consider all this the next time our city and county commissioners approve more new residential whether it's infill or sprawl:Our city's current budget crunch could easily be tied directly to infrastructure expenses needed to serve new housing developments. The community is way over extended in this regard. If residential growth paid for itself and was financially positive, we would not be in a budget crunch. But with increased numbers of houses you have increased demand on services, and historically the funding of revenues generated by residential housing does not pay for the services, they require from a municipality.We need commissioners who are not in bed with development. It seems at least 4 of 5 current city commissioners fit that description.

Richard Heckler 9 years, 5 months ago

There may be some some once occupied homes however according to some westside folks there is a significant contingency of new homes and apartment dwellings that have remained vacant now for quite sometime....yep never had a tenant.A tight residential market would be best for home values instead of a flooded market always.

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