Advertisement

Archive for Sunday, August 30, 2009

Westar plant may be annexed

City would see $900K tax gain

An overwhelming majority of comments sent to the state about the proposed coal-fired power plant in western Kansas are supportive of the project.
Sunflower Electric Power Corp. is seeking a permit to build an 895-megawatt plant near Holcomb in Finney County.

An overwhelming majority of comments sent to the state about the proposed coal-fired power plant in western Kansas are supportive of the project. Sunflower Electric Power Corp. is seeking a permit to build an 895-megawatt plant near Holcomb in Finney County.

August 30, 2009

Advertisement

Decades ago, the tower of Westar’s coal-burning power plant was a solitary smokestack in the country.

Back in the 1930s when the plant was built, the thought of Lawrence someday growing out to the facility on the banks of the Kansas River likely was seen as a pipe dream that would take more smoke than even the plant’s stack could produce.

But now, the city’s Santa Fe Industrial Park — which houses Berry Plastics, Lawrence Paper Co. and others — abuts the property. Just a few hundred yards from the front gate of the plant are city homes that have built up along the northern portion of Kasold Drive.

All that has some city leaders wondering whether now is the time to invite the power plant into the city limits. In the process, the city would add to its tax rolls — in one fell swoop — a property that is valued at about $100 million. It would generate nearly $900,000 per year in new property taxes for the city.

“I think it is time that we have the discussions about annexing that property,” City Commissioner Mike Amyx said. “There will be a lot to consider, but I don’t think it hurts us at all to start talking about it.”

But make no mistake. If the city does extend such an invitation, what will follow will not be a party. Leaders with Topeka-based Westar Energy have consistently fought any effort by the city to annex the property, saying electric customers would receive no benefit from having the plant in the city limits. Instead, the company — and thus electric customers — would be paying more in taxes simply because the city has changed some boundary lines on a map, they argue.

“From our standpoint, whenever we’ve looked at it, it seems like more money for little or no additional services,” said Chad Luce, manager of customer and community relations for Westar. “It just hasn’t made a lot of sense.”

Then there’s the Wakarusa Township. For a long, long time, the Westar plant has accounted for about half of all the property taxes generated for the township, which is the government entity that maintains the roads and runs the fire department in the rural area just outside of Lawrence. The township’s trustee said if the plant becomes the territory of the city, it would be “devastating” to the township and the tax bills of its residents.

“It won’t work,” said township trustee Ernest Butell.

New numbers

In one way, though, an annexation of the plant may be more feasible than it has been in years.

The city in the early 1970s made a serious effort to annex the plant but ultimately backed away after Westar said the annexation would increase the electric bills of Westar customers across the state. The argument was that annexation would require the plant to pay a higher property tax rate. Westar has the right to pass along higher tax costs to its electric customers.

As recently as 2006, Westar estimated in a letter to the city that an annexation would increase the plant’s property tax bill by about $1 million.

But new numbers obtained by the Journal-World suggest the increase is now much less. Using property valuation numbers from the state’s Division of Property Valuation, annexing the plant and the surrounding “buffer ground” adjacent to the plant would result in a property tax increase of $290,050. Using current mill levies, the city would receive $863,861 in property taxes from the plant. That’s compared with $573,811 in taxes paid to the Wakarusa Township. If annexed, the plant no longer would pay Wakarusa Township taxes.

It wasn’t immediately clear how Westar came up with the $1 million estimate, but Luce said upon further review, Westar agrees with the new $290,000 estimate.

Luce also confirmed that Westar would be able to spread the additional costs over about 300,000 accounts in the company’s northern territory.

If the tax increase were spread out equally, that would amount to about an extra $1 per year for every electric customer. Luce concedes the increase per customer would not be huge. But he said the company is concerned about the precedent.

“As a regulated utility, every decision we make has an impact on our customers and their bills,” Luce said. “If we can’t come up with a known benefit, it isn’t prudent to ask our customers and shareholders to pay for it.”

A benefit battle

City Manager David Corliss has his staff studying the feasibility of an annexation. He suspects the coal plant receives some significant benefit from being near the city.

The plant is now close enough to the city that Lawrence provides city water service to the plant. Traditionally, businesses that use city water are required to be in the city limits. Westar, according to city records, bought 33 million gallons of water from the city in 2008, making the company the ninth largest single water user in the city. Earlier in the decade, the company was purchasing around 70 million gallons.

Corliss believes if there were a significant fire at the plant, it would be the city’s fire department that would provide the largest response to the incident rather than the much smaller Wakarusa Township Department.

And then there’s the more recent, prickly issue of the Bowersock Dam. The city earlier this month agreed to spend $2.45 million to repair the dam on the Kansas River. The city is making the repairs because the dam keeps the river levels high enough for the inlet pipe of the Kaw Water Treatment Plant to operate properly.

The city was hoping that Westar would agree to help pay for some of the costs because the coal plant has a similar intake pipe that sucks water out of the river to use in the energy production process.

Westar declined, saying a pair of studies showed that the dam was not overly important to their inlet pipe, which is farther upstream than the city’s, Luce said.

That left some city leaders disappointed.

“I have to say I was upset the other night when we got the final word that they would not consider participating in it,” Amyx said.

Luce said he understands the city’s perspective on some issues. For example, he agrees the Lawrence fire department likely would be a major responder of a significant fire at the plant. But such an occurrence would be rare.

“The question seems to be whether that possibility rises to the need to annex?” Luce said.

A tax base boon

Another way to look at it is whether the benefit to Westar would be close to the benefit the plant would have on the city’s tax base.

There’s no arguing the benefit to the city’s tax base would be huge. In fact, it could be the largest single addition to the city’s tax base in its history.

The state’s Division of Property Valuation said the plant and its buffer ground are valued at $98.23 million. In terms of its assessed value — or its taxable value — the plant would increase the city’s tax base by $32.41 million.

To put that in perspective, the city’s tax base declined by $7 million this past year, and grew by only $7.2 million the prior year.

But Corliss said an annexation would not be a tax grab on the city’s part.

“I don’t want people to believe that this is our new plan for growing the tax base,” Corliss said. “I think the main reason to do this would be because Westar is benefiting from city services.

“And then the policy question becomes whether the plant’s tax base should be helping support all the services we provide. Should it contribute to our 52 parks, should it contribute to our strong downtown, should it contribute to one of the best fire departments in the region? I think when we do the analysis, the answer will be yes. But we’ll see.”

All that rings hollow to Wakarusa Township leaders. Butell said the major question should be why the plant should be in the city.

“The only reason they want to do this is because they want the taxes,” Butell said. “The city doesn’t go out of its way to promote industry that pays decent wages. If they would go out and attract jobs that pay a decent wage, they wouldn’t have to annex anything.”

City leaders have said that working with Wakarusa Township to ensure the township’s budget isn’t destroyed by the loss of the power plant would be necessary if the city moves forward with an annexation.

“Without a doubt, we would have to create some sort of transition period for them,” Mayor Rob Chestnut said. “We can’t just leave them high-and-dry.”

Comments

Bob_Keeshan 4 years, 7 months ago

Newsflash genius - the people of Wakarusa aren't getting less government but the rest of us are. That's how a society works, it is something you should have learned in 9th grade Government.

4,900 individual taxing units of government in the State of Kansas, and more government employees per capita than California.

I guess if you like having more government than California more power to ya.

0

notajayhawk 4 years, 7 months ago

Bob_Keeshan (Anonymous) says…

"This sounds remarkably like the arguments I've read here about Wal-Mart, AT&T, and other large corporations."

"Sure, I get it. Corporations good, government bad. That's a pathetic line of reasoning, but thanks in advance."


Not for nothing, bobbie, but WTF are you talking about?

I was pointing out that, regardless of whether the people of Wakarusa pay their taxes to the township or to Lawrence, they aren't getting 'less government.' But hey, don't let me keep you from interjecting an entirely unrelated anti-business rant.

Besides, bobbie-boy - aren't YOU the one that said government was bad? Let me refresh your aging memory:

30 August 2009 at 9:06 a.m.

Bob_Keeshan (Anonymous) says…

“Kansas has too much government, so any change that will eliminate one of the 4,900 individual taxing units in this state is OK by me.”

0

Kendall Simmons 4 years, 7 months ago

There’s been a bit of a “Lawrence Fire Department has put out fires at Westar”/”No they haven’t – they won’t be let in” argument going on between “Keith” and “labmonkey”.

First of all, the LFD simply wouldn’t show up without an “invitation”, any more than it would show up at a fire in Eudora or Baldwin. So, there has to be some sort of arrangement with at least the Wakarusa Township for showing up at fire calls if, indeed, they are showing up.

Second, the Westar plant has to be calling someone for any fire department to show up. It could be an automated fire alarm system, not a person calling 911…but the call is going out nonetheless or else no fire department would know there was a fire.

Third, it really is unreasonable to think that a single fire truck and trained team would be able to handle every fire situation that might occur at the plant. (And Corliss did use the term “significant” fire.)

Finally, it’s also possible that the LFD have indeed shown up, but to provide potentially needed backup medical support, rather than fire support. Like they do on ambulance calls.

Since I’m assuming labmonkey’s comment is accurate - that if “P2SO5 which when gets wet, produces a cloud of H2S gas. This could be very dangerous for the residents of north Lawrence if the wind is coming out of the right direction.” – I can understand his thinking. Plus I can see the need for initial specialized handling.

However, I’m also inclined to think that Westar staff/supervisors are trained and capable of determining when they need help beyond what they can handle. As a result, I think that labmonkey's claim that Westar staff will always disallow LFD personnel and equipment entrance in an emergency is a bit far-fetched.

0

Bob_Keeshan 4 years, 7 months ago

notajayhawk (Anonymous) says…

Um - no.

For the people living in the area to be annexed, they would not have any less government at all. They would still have four primary levels of government (local, county, state, and federal) - actually, they would then be subject to more government, not less, since they would be governed by the larger bureaucracy of Lawrence rather than their own, smaller, local government. More statutes and regulations designed for the people of a wider area instead of specifically for their own needs - yeah, that would be great.


This sounds remarkably like the arguments I've read here about Wal-Mart, AT&T, and other large corporations.

Sure, I get it. Corporations good, government bad. That's a pathetic line of reasoning, but thanks in advance.

0

Centerville 4 years, 7 months ago

This will come straight off the top of our increased electric rates. And that will be in addition to the 15% annual increase from the deal that Sibileus cut with Westar. A more truthful headline would be "Electric Customers may be Hijacked."

0

macon47 4 years, 7 months ago

the lawrence voters love for "others" to pay more taxes, they proved it in the last T tax election. they approved two taxes for us to pay of course they dont pay any taxes cause they never had a job and are already living off govt subsidies we deserve all the taxes the city can throw at us

0

Danimal 4 years, 7 months ago

This a completely ridiculous grab for land and money. I'm sure having to pay an additional million dollars in property taxes every year would be more than enough reason for Westar to close this plant and build another one somewhere else. Lawrence's leadership never sees the big picture.

0

Keith 4 years, 7 months ago

"labmonkey (Anonymous) says… Keith- They may have responded, but it is unwanted…and employees are trained to man the gate and not let anyone in in an emergency. FMC/Astaris/ICL has their own firetruck on site and have trained their own fire brigade"

It was more than a response, again I say in the past, maybe distant past to you. Early 80's there was a fire out there that took 3 days to smother. LFD was certainly used then. Since FMC ( at the time) was out of the city limits, they were charged per hour for the LFD. None of this matters, my original point was the city's selective justification for annexing Westar. It was meant to be sarcastic, but lost its meaning electronically.

0

oneeye_wilbur 4 years, 7 months ago

hard to believe that the plant would generate $900,000 new taxes for the city, how come the article didnt give in detail how much is paid now, to the county, state and school districts and then what the real NEW total would be broken down again if the property is valued at 100 million and would produce 900,00 dollars in new taxes, would then the new hotel which is valued at least at 38 million, generate $300,000 a year in taxes for the city only?

nothing in the article makes sense, except that what needs to be done is to build the new dam upstream, the water plant can be moved upstream as well.

0

lwctown 4 years, 7 months ago

Even thought it would only be a slight increase in electric bills it is really a tax increase on all of us.

0

labmonkey 4 years, 7 months ago

Keith-

They may have responded, but it is unwanted...and employees are trained to man the gate and not let anyone in in an emergency. FMC/Astaris/ICL has their own firetruck on site and have trained their own fire brigade. If they aren't annexed, I wouldn't want them to be...like I would hate to see the Lawrence Loonies make a land grab on the Westar plant. I have seen how towns have black-mailed companies with power plants in their towns for funding for every little project. "We want this skate park. Fund it or we will make complaints to the EPA about you."

Hornhunter-

ICL makes P2SO5 which when gets wet, produces a cloud of H2S gas. This could be very dangerous for the residents of north Lawrence if the wind is comming out of the right direction. You do not have these worries when putting out a coal fire (which you pretty much have to contain).

0

JackRipper 4 years, 7 months ago

63BC (Anonymous) says…

Lawrence is full of well off people who try to make themselves feel better about themselves by proclaiming their concern for the environment. That is demonstrated everyday by the bumpersticker and/or hybrid driving liberals that drive to KU instead of taking the bus that many times runs in the area they live.

0

JackRipper 4 years, 7 months ago

How amusing, our pro business, pro growth commission, not being able to come up with anything except building business parks to give the developers something to do since the housing market died, now is going to annex something that has been here all this time and even the so called loonie left didn't even consider annexing. Chestnut and the development community, I thought all those years of building a bedroom community was suppose to pay for itself. Looks like that didn't work so maybe you all should learn something and recognize that what we really need are people who are starting new businesses, not building business parks for people in the rest of the country to come here to use. Lawrence got lazy thinking the easy money from developing would go on for ever.

I am no fan of Westar but I'm curious how much the power plant that benefits entirely from the dam are kicking into the repair project.

0

63BC 4 years, 7 months ago

But this is Lawrence---the place that says coal powered plants are icky.

So, surely, the city would only do this to shut the plant down. Sure, they'd forgo the tax windfall then and not be able to heat homes or light businesses or run computers at KU.

But Lawrence cares most about the environment. Right?

That's why it doesn't want the rest of the state to have coal-fired power.

And it would never use such a horrible dirty power source for itself or take the tax revenue from such a polluting monstrosity.

Right?

0

cheeseburger 4 years, 7 months ago

Does Corliss really expect us to believe this is something other than a money grab? That is exactly what it is, and to call it something else is flat wrong. Is it too much to ask to have a little honesty in government? (Never mind - I think I answered my own question!)

0

notajayhawk 4 years, 7 months ago

Bob_Keeshan (Anonymous) says…

"The #1 reason to annex? It would be the death knell for the Wakarusa Township."

"Kansas has too much government, so any change that will eliminate one of the 4,900 individual taxing units in this state is OK by me."

"I can think of nothing better than to leave the township “high and dry.” If you are a believer in “less government,” then you are a supporter of this annexation."

Um - no.

For the people living in the area to be annexed, they would not have any less government at all. They would still have four primary levels of government (local, county, state, and federal) - actually, they would then be subject to more government, not less, since they would be governed by the larger bureaucracy of Lawrence rather than their own, smaller, local government. More statutes and regulations designed for the people of a wider area instead of specifically for their own needs - yeah, that would be great.

But what the heck - let's follow your plan. Lawrence can swallow up Eudora, Baldwin, everything in the area - and then be annexed by Topeka. Why, that would be wonderful.

0

feeble 4 years, 7 months ago

Might as well have Lawrence annex it before Overland Park beats them to it. Those monstrous JoCo cities can only sprawl southward for so long, before turning westward.

For those who might miss it, [/sarcasm].

0

farfle 4 years, 7 months ago

"There’s no arguing the benefit to the city’s tax base would be huge. In fact, it could be the largest single addition to the city’s tax base in its history."

If you think that this will lower your property taxes I think you are wrong. The city will just pour the extra money down one of its rat holes or create a new one.

0

macon47 4 years, 7 months ago

the voters had an excellent opportuinty to send the city a message when they put the sales tax options to a vote.

but we all stayed at home and let the losers pass all of the taxes

we deserve what ever the city wants to do to us we are our own worse enemy

0

puddleglum 4 years, 7 months ago

useless name calling is pointless. lets try to keep it a discussion, without personal attacks y'all.

I sure wish I could use city water and services without having to pay city taxes.

why not annex the land-then pass a law forbidding utility companies to pass on tax expenses to their customers.

seems like a good way to keep these utility companies in check. I love my electricity as much as the next guy, but I can't wait to have a windmill-power generator on my roof.. oh, do I need a permit for that?

0

Richard Heckler 4 years, 7 months ago

This will not come as a great source of revenue for the local cookie jar. Wayyyyy too much local expansion has created a tax dollar money hole aka Lawrence,Kansas. How much will this cost the taxpayer is the HUGE question?

If anyone believes that Westar customers won't be charged more as result of this is not on planet earth.

Not only that taxpayers will be picking up the tab for additional infrastructure going in that direction so this is not exactly a bowl of cherries. Police,fire,USD 497,water and sewer lines,streets and tons of maintenance connected to this decision. How much will this cost the taxpayer is the HUGE question?

Someone will be saying all of this " will cost only so many dollars for every $100,000 and blah blah blah" How many times times have taxpayers heard this over the past 25 years? How much will this cost the taxpayer is the HUGE question?

Lawrence,Kansas has a ton of older existing infrastructure that is being neglected how can taxpayers afford more responsibility?

How much will this cost the taxpayer is the HUGE question?

0

hornhunter 4 years, 7 months ago

labmonkey, So what gas will be produced from spraying water on a coal fire?

0

Keith 4 years, 7 months ago

"labmonkey (Anonymous) says… Keith-

You are an idiot. They have their own fire brigade and employees are to NOT allow the fire department on the premises. Shooting water in the wrong area could gas all of north Lawrence."

I may be an idiot, but I know the LFD has had to respond to fires out there in the past. If the city criteria for annexing Westar is fire protection, then annex the phosphorus plant too. They won't do that, thus shooting their justification for annexing Westar in the foot. Try to think things through in the future, before useless name calling.

0

macon47 4 years, 7 months ago

sorry bob, but 300 grand is still a chunk of change to alot of us nope it is still new taxes

0

Bob_Keeshan 4 years, 7 months ago

Using current mill levies, the city would receive $863,861 in property taxes from the plant. That’s compared with $573,811 in taxes paid to the Wakarusa Township. If annexed, the plant no longer would pay Wakarusa Township taxes.

Nope, not $900,000 new taxes.

0

macon47 4 years, 7 months ago

this is pretty stupid, it just gives the city more money to waste on flower pots, parks and fancy foo foo for the grass roots people. westar will just raise our rates to offset it tax and the citizens are left with nothing but a bigger utility bill

0

labmonkey 4 years, 7 months ago

Keith-

You are an idiot. They have their own fire brigade and employees are to NOT allow the fire department on the premises. Shooting water in the wrong area could gas all of north Lawrence.

I hope Westar fights tooth and nail over this. That is added taxes on the electric bill to the customer. For those saying that the might move....they won't. It is hard to receive a permit to build a new coal plant in the first place...and if they ever did, it would be at the existing site. Coal has a very small radioactive charge....but enough that any company leaving a site would have to pay billions to treat and bury the dirt.

0

50YearResident 4 years, 7 months ago

Logic man says, "A very possible outcome will be that WE closes the plant, and builds a new one further out. But maybe a decade in the future. Then the old decomissioned plant and/or unusable land won't bring in much revenue for the City, only liabilities"

I say, then the City can purchase the land, use city workers to clean it up and turn it into commercial property just like the Co-op prize. (Sarcasm)

This is a disguised tax grab that will be transferred directly to city taxpayers by Westar.

0

cowboy 4 years, 7 months ago

1 , the Wakarusa township takes excellent care of the rural needs in my area , clear roads , timely maintenance , assistance during pasture burning season , thanks wakarusa Township staff.

Second , is this just a precursor to the city annexing a broad swath of ground. the City is inept at managing the current holdings much less subjecting a larger population to it's regressive policies.

0

Bob_Keeshan 4 years, 7 months ago

The #1 reason to annex? It would be the death knell for the Wakarusa Township.

Kansas has too much government, so any change that will eliminate one of the 4,900 individual taxing units in this state is OK by me.

I can think of nothing better than to leave the township "high and dry." If you are a believer in "less government," then you are a supporter of this annexation.

0

cowboy 4 years, 7 months ago

So Coreless has taken all the money he can find within the city limits and now wants to have a raid on the surrounding county. This is nothing other than a money grab and should be stopped in it's tracks.

0

Keith 4 years, 7 months ago

I wonder, is the phosphorus plant in the city limits? The Lawrence Fire Dept has put definitely put out fires there in the past.

0

LogicMan 4 years, 7 months ago

And lots of lost local, good-paying jobs.

0

LogicMan 4 years, 7 months ago

A very possible outcome will be that WE closes the plant, and builds a new one further out. But maybe a decade in the future. Then the old decomissioned plant and/or unusable land won't bring in much revenue for the City, only liabilities.

0

Marion Lynn 4 years, 7 months ago

Yep, typical corliss biosolids.

Any increase in taxes to Westar would be passed on the utility customers in the form of higher rates.

"But Corliss said an annexation would not be a tax grab on the city’s part."

yeah, right

"City leaders have said that working with Wakarusa Township to ensure the township’s budget isn’t destroyed by the loss of the power plant would be necessary if the city moves forward with an annexation.

“Without a doubt, we would have to create some sort of transition period for them,” Mayor Rob Chestnut said. “We can’t just leave them high-and-dry.”

Marion writes:

Sure they can and you bet that they will in order to drive them into accepting annexation into the People's Republic of Lawrence.

0

Commenting has been disabled for this item.