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Archive for Sunday, August 1, 2010

Water works: Customers of city look elsewhere

August 1, 2010

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It may become known as the area’s great water wager.

A group of area rural water districts is expected to decide within the next 30 to 60 days whether to proceed with a $17 million project to build a new water plant between Lawrence and Eudora.

The stakes are significant for Lawrence residents because a new plant is expected to siphon off some of the city’s largest wholesale water customers.

That would create a wrinkle in the city’s plans to pay for an already-completed $17 million expansion of the city’s Clinton Water Treatment Plant.

“Those wholesale water customers are important to us,” City Commissioner Rob Chestnut said. “The more water we sell outside the city, the less costs that have to be recovered from water users inside the city.”

In other words, the big buyers make it easier for the city to avoid big increases in the water rates it charges residents.

Shifting waters

Since the late 1970s, the city of Lawrence has been the dominant water provider in the area. It has contracts to provide treated water to Baldwin City and Douglas County Rural Water Districts Nos. 1, 2, 4, 5 and 6, among others.

But now RWD Nos. 2 and 5 and Osage County Rural Water District No. 5 are nearing the end of a multiyear feasibility study for a new water plant. The three districts are contemplating operating a new wholesale water district that would have its own plant and sell water to other major users in the area.

The new wholesale water districts also have invited Rural Water District No. 4 and Baldwin City — which is the second largest user of Lawrence water, behind KU — to join the district.

Leaders with both RWD No. 4 and Baldwin City have said they are actively considering shifting future water purchases to the new district.

Larry Wray, the leader of the new wholesale water district, said he expects decisions to fall into place soon.

“We’re finally at that point where everybody is going to have to make up their minds,” Wray said. “Some big decisions are on the way.”

The wholesale water district already has an option to purchase “several acres” of ground north of North 1500 Road between Eudora and Lawrence, Wray said. The property is adjacent to the Kansas River. A plant at the site would use ground wells that would be recharged by the Kansas River.

The plant likely would start relatively small, Wray said, but easily could be expanded. The project, however, would carry a large initial price tag because it would involve about 30 miles of new pipe. Wray said current estimates have the project at about $17 million.

“Nothing is set in stone yet,” Wray said, “but I think a lot of us think we’re going to do this.”

City to dive in

Lawrence leaders will try to talk area water districts out of building a new plant. Mayor Mike Amyx told staff members during this summer’s budget session that he believes it is imperative to keep the wholesale water customers, now that the city has undertaken the $18 million expansion at the Clinton plant.

“This is about us selling more water,” Amyx said. “We need to figure out how to do that. Let’s get a return on this investment we have made.”

The city is going to try to sell more water by doing just what a big superstore does to sell more gadgets: Lower prices.

During the budget session, the city committed to lower the rate it charges wholesale customers in 2011. Current plans call for the wholesale rate to drop to $3.64 per thousand, down about 5 percent from the current rate.

But now, the question becomes whether it will be too little, too late. The last two years, Lawrence has increased the wholesale rates by 15 percent or more each year. Those rate increases created high levels of concerns with wholesale water customers.

“I found it pretty difficult to understand why they took that position in this economy,” said Baldwin City Mayor Ken Wagner.

Baldwin City has hired an engineer to examine ways that Baldwin City could shift its future water purchases away from Lawrence. Wagner said two options are receiving the most attention. One is to join up with the area rural water districts to build the new plant between Eudora and Lawrence. The second option is to join up with the city of De Soto and others to revamp an old water plant at the former Sunflower Army Ammunition Plant.

Wagner, though, said he’s not ruling out working with Lawrence.

“They’ve already told us that they’ve revised their rates down for next year, but there really hasn’t been any indication of what they are going to do after 2011,” Wagner said. “That’s something we’ll have to know.”

City Manager David Corliss said he will meet with wholesale water customers to determine what type of long-term contracts can be developed.

“We are asking them what level of assurance they need in regards to future rate increases,” Corliss said. “We want to work with them on that.”

Scott Schultz, administrator for RWD No. 4, said his group also still wants to hear from Lawrence. But his district — which provides water for an area between Lawrence and Baldwin City — has an offer on the table from the new wholesale water district. RWD No. 4 also already has a connection with a Johnson County water district, which receives its water from the city of Olathe. Schultz said buying more water on the Johnson County contract, which already is 50 cents per thousand cheaper than Lawrence — is a possibility.

“We need a long-term contract of 20 years or more, and a supplier that has some ability to give some price certainty is more likely to get our business than a supplier who raised prices in the 12 to 18 percent range over the last few years.

“Don’t get me wrong, we think the water quality from the city of Lawrence is excellent. But so is the water quality from the city of Olathe.”

Comments

imastinker 4 years, 4 months ago

I recall the conversation on here about how we ought to soak the people that don't pay taxes in Lawrence instead of raise rates here. I guess the joke is on those people now.

It's a shame because lawrence already has the infrastructure in place and the variable cost of operating this is likely very low.

bcresident 4 years, 4 months ago

When is the city of Lawrence going to realize that the residents out in the county are sick and tired of Lawrence and KU's needs dominating all decisions in Douglas County? There are plenty of us out here with more than half a brain who are tired of Corliss and crew trying to balance their budgets on our backs. County residents should be treated as respected partners not indentured servants. Looks like the chickens are finally coming home to roost. Kudos to the rural water districts and the Baldwin City council for not rolling over and accepting these unjustified increases. good grief--just how stupid do you think we are out here?

Tandava 4 years, 4 months ago

For decades, the City of Lawrence has dictated to the rural water districts how many new meters they could have, and the price of water, and so on. Hooray for the rural water districts for finally giving the City of Lawrence the snub and taking matters into their own hands.

With the City, it's ALWAYS a case of either too little too late or after-the-fact overkill.

Centerville 4 years, 4 months ago

Why not buy from RWDs 2 & 5, rather than build another plant? As a retail customer, I wouldn't mind the city doing a little comparison shopping.

John Hamm 4 years, 4 months ago

Well the past poor decisions of Lawrence's leaders are really starting to come home to roost. It's time our "leaders" realized their decisions have to be based not only on the "needs" of now but plan for the future.

jafs 4 years, 4 months ago

Since a large part of this problem is the new plant that was built in anticipation of growth, I'd say you're off on your analysis.

Amy Heeter 4 years, 4 months ago

What's that expression about chickens ncomint home to roost?

gccs14r 4 years, 4 months ago

I wouldn't call Lawrence water excellent, or even particularly good. I'd never heard of pink slime mold until I moved here.

Joe Hyde 4 years, 4 months ago

Other considerations aside, building a new water plant for Eudora and its surrounding area, plus tying Baldwin into Johnson County's system, plus upgrading the old Sunflower treatment plant -- these actions would have the effect of diluting the overall risk in the event one or both of Lawrence's treatment plants suffered a problem so severe that they needed to be shut down long term.

As the bed of Clinton Lake steadily builds up with sediment carried in by the Wakarusa River, Rock Creek and other feeder streams, the lake's pre-treatment water quality will gradually become worse. That drop in water quality and safety is not the fault of the water plant; rather, it's the standard action of reservoir hydrology at work. You simply can't dam up streams that carry heavy sediment loads without this sediment accretion happening.

And since the Clinton treatment plant serves the most customers, and serves them over a much wider geographical area than does the North Lawrence plant, any serious problem that interrupts the Clinton plant's output always has far-reaching impacts. If they ever both go down, look out.

Therefore, spreading the risk by means of building new plants serves to protect not just those new areas, it also protects Lawrence by creating a new emergency backup water supply that, although of minimum flow, would at least give us some small amount of water in a worst-case scenario.

The downside is that installing new treatment plants will immediately begin to lure even more peripheral and nearby rural development in and around Eudora and Baldwin City. That, in turn, hastens the arrival of the Topeka/Lawrence/Kansas City Mega-metro Area, which cannot be accomplished without a correspondingly higher demand for concrete and asphalt aggregates, which, given current extraction methods, won't be done without dredging even more sand and gravel from the Kansas River.

MarcoPogo 4 years, 4 months ago

She's my daughter! She's my sister! She's my daughter! She's my sister!

independant1 4 years, 4 months ago

Lawrence is thinking too small. About 550 miles west one could get half a penny per gallon. Think big Lawrence.

Richard Heckler 4 years, 4 months ago

Perhaps Lawrence officials and city hall need to stop expanding the city. They spend money before getting it. AND since Lawrence has become a tax dollar money hole one of their sources for covering over spending,over building and to cover the cost of expanding the "new Lawrence "is charging more for water and other fees.

East side tax dollars have been funding west side expansion at the expense of east side infrastructure such as streets,sidewalks and the list could grow. Mismanagement is the word.

Stop the new growth that does nothing but increase our taxes! Lawrence needs solid economic growth instead of reckless spending that does not pay back.

It's reckless expansion AND spending that get Lawrence,Kansas in this undesirable position.

Notice by not increasing property taxes the city increased our taxes on water etc etc etc. How did we win?

camper 4 years, 4 months ago

It looks like RWD officials South of Lawrence are doing a good job serving there community. It would be sad if Lawrence lost this contract, but somehow I think the best outcome is going to happen for both Lawrence and Baldwin. It is good to see this happening. I can see both arguments on this issue.

riverdrifter 4 years, 4 months ago

Amazing that Baldwin isn't looking at ramping back up their well field in the tonganoxie sand formation just south of town. Lots of fine pure water there.

Janet Lowther 4 years, 4 months ago

I have to agree with Cheesburger up at the top of the comments: Lawrence has been using contractual restrictions on the number of water meters these water districts to discourage rural development for ages.

Rural water is expensive: it takes a whole lot of pipe per user. . . Typically there may only be ten or thereabouts users per mile of pipe, and sometimes even fewer.

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