Archive for Saturday, May 21, 2011

City playing waiting game with new treatment plant

May 21, 2011

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By the numbers

Here’s a look at the average monthly water and sewer bill — based on 8,000 gallons of usage per month — in Lawrence and surrounding communities:

  1. Gardner: $90.30

  2. Bonner Springs: $86.29

  3. Kansas City, Mo.: $78.28

  4. Kansas City, Kan.: $76.98

  5. Johnson County: $72.81

  6. Topeka: $66.63

  7. Lawrence: $65.02

  8. Olathe: $64.19

  9. Lee’s Summit: $59.21

  10. Independence: $57.98

  11. Manhattan: $56.68

Here’s a look at the average monthly sewer and water bill — based on 8,000 gallons of usage — in Lawrence over the past several years:

2000: $41.60

2001: $42.48

2002: $43.42

2003: $44.27

2004: $45.36

2005: $49.96

2006: $53.24

2007: $56.92

2008: $59.61

2009: $62.60

2010: $65.02

2011: $65.02

It is the big bet at Lawrence City Hall.

Someday the economy will improve, and builders will start constructing homes at a pace faster than they are today. And it is certain they’ll all want toilets that flush and sinks that drain.

But it also is a certainty that if the pace of home construction picks up significantly, the city’s lone sewage treatment plant won’t be able to handle all the toilets, sinks, showers, and, well, you get the picture.

None of that surprises city leaders. The city already has purchased a site south of the Wakarusa River to house a new $80 million to $90 million sewage treatment plant. What city leaders are trying to figure out now is when that plant should be built.

To answer that question, they are trying to figure out the answer to a question the whole world wants to know: When will the economy turn around? The only certainty in all of this is that if the city waits to build a plant until the economy really starts to hum again, it has waited too long.

“We think it will take four years to design and build the plant,” Mayor Aron Cromwell said. “If the economy really turns around before we complete the project, we’ll have people screaming at us that they can’t build out west.”

City commissioners don’t want that to happen.

But they also don’t want city residents screaming at them about high sewer bills, especially during a time when the economy is squeezing average households in many other ways. But that is certainly a possibility.

“If this is the year we start the planning for the wastewater plant, there will be a very significant increase in sewer rates,” Cromwell said.

Caution urged

A very significant increase means a jump in rates of 10 percent or more. How much more, though, is a number that city leaders have been reluctant to speculate on thus far.

Clearly, some city commissioners are leaning toward the idea that this year won’t be the year they have to start planning the plant.

“It is a tricky question because you don’t want to pick the wrong year and put yourself in a situation where you have to tell somebody to wait,” said City Commissioner Mike Amyx. “But based on the information we have right now, I just don’t see it for this year.”

Others, though, said there is a lot to think about. New City Commissioner Hugh Carter, for example, said it is possible that the final leg of the South Lawrence Trafficway could be completed by 2015. That could create a boon in building activity for the city. How bad would it be for the community not to be able to take advantage of that newfound interest in the community?

“We have to be thinking of the big picture,” Carter said. “The things we do right now, in what I believe are the early stages of a slow recovery but a long recovery, will be very important to how well we do in the future.”

Even if commissioners don’t start the planning for the sewer plant as part of this next budget — the 2012 budget — there could still be an increase in sewer rates. City commissioners last year went against the advice of staff and chose not to raise water and sewer rates for 2011. Both Cromwell and Carter expressed questions about whether that would be possible in 2012 as operational expenses rise and the need to maintain aging infrastructure increases.

But Amyx said it is too early to say that rates will have to rise in 2012. He said he will want more information about what the city can accomplish without a rate increase.

Water questions

Sewer rates are only part of the monthly bills residents receive from the city. Water rates also are creating questions at City Hall. But with the water system, the question isn’t when to start a major expansion, but rather how to keep up with the payments on an already-completed expansion.

The city completed an approximately $20 million expansion of the city’s Clinton Water Treatment plant in the late 2000s. The expansion gives the city far greater capacity to treat water, but the city has not been selling as much water as it used to.

In fact, numbers from City Hall show that Lawrence is selling less water now than it did in the 1990s. The numbers show water production peaked in 2002 and has declined by about 30 percent since then.

But costs have not been declining. Even though the city is producing less water, chemical costs to treat the water have nearly doubled in the last decade. In 2000, the city spent about $594,000 on chemical costs. In 2010, that total had grown to $917,000. Personnel costs also have increased, as most of the department’s employees aren’t responsible for treating water but rather maintaining the city’s waterlines and systems. Personnel costs were $2.3 million in 2000 and had grown to $4.1 million in 2010.

Cromwell and Amyx both said the city has to try to squeeze as much efficiency out of the system as it can.

“If there are increases that have to happen on water rates, I’m hoping they will be as little as possible,” Amyx said.

He also said he wants the city to continue with its efforts to lock wholesale water customers into longer-term contracts with the city. Currently, Lawrence treats the water for Baldwin City and a variety of rural water districts. But some of those major customers have been exploring other treatment options. Amyx said the city needs to be aggressive in keeping those customers.

“If we’re going to be in the water treatment business, we need to sell as much water as we can to as many customers as we can,” Amyx said.

Commissioners will set the water and sewer rates as part of the 2012 budget process. Commissioners began debating the budget last week and likely will finalize the budget by mid-August.

Comments

LogicMan 4 years, 2 months ago

Well, well. I think I, no I clearly remember suggesting here that they "go slowly" on the new sewage treatment plant. If they had, it would already be half done, and at a very reasonable cost due to the recession's effect on construction costs.

The reduced water sales must have many reasons such as water saver toilets, reduced watering of lawns, and loss of industry (the Co-op). Somewhat high cost of water too?

Crazy_Larry 4 years, 2 months ago

“If the economy really turns around before we complete the project, we’ll have people screaming at us that they can’t build out west.” Correction, you'll have a few 'developers' squealing like the pigs they are.

Building it sooner than later will cost less (period); waiting for the 'economic boom' will cost significantly more; waiting for the economic boom and waiting for the 'economic boom' then borrowing the money (instead of paying with the utility's/city's cash reserves) will cost We the People even more.

Want to sell more water? New mandate: every home has a swimming pool, Koi pond, green grass and fountain.

cowboy 4 years, 2 months ago

“If we’re going to be in the water treatment business, we need to sell as much water as we can to as many customers as we can,” Amyx said.

It seems rather obvious that trying to be the water king is really not working.

jafs 4 years, 2 months ago

There's nothing that mandates we have to continually extend infrastructure to appease developers.

Richard Heckler 4 years, 2 months ago

Not on my tax dollars no way jose'.

There is more speculation than substance on this matter.

What's missing in Lawrence? Excellent paying jobs.

What's going on? High dollar gas prices which means people will be relocating closer to employment which according to the news is taking place. Some students may not get closer than JCCC for their first few years.

There are at least 9 million homes on market with thousands of additional foreclosures on the horizon.

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.

Why not IMPACT FEES or EXCISE TAXES? Local real estate developers have had a great time laughing all of the way to the bank on the backs of taxpayers. This is the root of the problem. Stop approving tax dollar mooching.

Let the real estate industry pick up the cost. This is the only group DEMANDING this high dollar toy. Tax dollar mooching is not cool and it is draining our personal bank accounts.

Richard Heckler 4 years, 2 months ago

The $100 million dollar sewage plant should be approved by the voters because local special interests are driving the issue for their own personal profiteering.

Do taxpayers want to spend $100,000,000(million) that will only bring on more new tax dollar expenses?

There is one consequence that usually goes unmentioned by the local media,city hall and elected officials - local profiteers are draining our pocketbooks and raising our taxes.

NOT necessary city growth is the result of over several decades of subsidies paid for by the local taxpayer. These range from the obvious to the obscure and include big projects-like the billions we spend on new roads as well as smaller ones-like the tax-breaks that encourage businesses to move to the edge of town and KILL downtown.

We've subsidized local profiteers at such a basic level for so long, that many people believe the status quo is actually fair and neutral. This is false-what we think of as a level playing field is tilted steeply in favor of local profiteers driving development.

How we subsidize profiteers: building new and wider roads building schools on the fringe extending sewer and water lines to not necessary development extending emergency services to the fringe

  • direct pay-outs to developers - for example developers of the new building at 9th and New Hampshire are demanding taxpayers furnish their tenants with parking spaces built with our tax dollars. Why should we taxpayers pick up that tab? Why would a bank approve a loan if a project had no parking for it's tenants?

Richard Heckler 4 years, 2 months ago

Hey First Management and City Commissioners The ninth and New Hampshire project should become a luxury hotel. Bill the parking to each over night tenant @ $12.00 - $15 per day. There are hotels that charge $25 up for protected convenient parking.

$100 per night in lovely downtown Lawrence.

A hotel also brings a hotel tax that would be good for the city cookie jars. Jayhawk fans would love a new hotel in lovely downtown Lawrence which would make it convenient to shop and eat out.

Richard Heckler 4 years, 2 months ago

I say it will be many many years before the market bounces back. KCMO has 10,000 homes available according to radio news.

11-17 million out of work with no immediate relief in sight says who will buying homes where there is no employment and/or low wages?

BigPrune 4 years, 2 months ago

This is the slowest economic recovery since the Great Depression and the Great Depression only went away when we entered World War II. Unfortunately, WWIII will be decided at the push of a button and nobody will be left. Hmmmm. Maybe we'll have a dynamic president elected like Reagan that will turn around this Jimmy Carter economy....

Maybe it's time to change the way our screwy City Commission government is run. We are NOT Boulder (we don't have any mountains or Denver), we certainly are NOT Austin, Texas, yet we try to emulate those two cities and have for years yet we are so far from close to being like them - it is a freaking joke!

Interest rates are bound to increase in the near future, especially since gas prices have almost doubled, and my food costs have increased 22% in 6 months. The housing market is NOT turning around at all. Hmmmm.....maybe Lawrence should concentrate on becoming a regional attraction and take advantage of Star bonds. We need economic vitality and good paying jobs that are far superior to KU's. We need jobs where the majority will look down at people who work for KU, not vice versa. We need an airport that can land large planes just to name a few things Lawrence needs. Small town mentality brings small time (and low paying jobs).

gccs14r 4 years, 2 months ago

Seems like the city would take a clue from having overextended itself on drinking water treatment and not also overextend itself on wastewater treatment. Considering the stranglehold the major developers have on this town (and their habit of running off businesses), the Commission should perhaps be planning for a mass exodus of people and abandoned housing, not any influx of new residents. As for the SLT, it has already been 20 years in the making, all because of an insane insistence on putting it through the wetlands, so there is about zero chance of the eastern leg even being started by 2015, much less finished.

25 4 years, 2 months ago

I just feel bad for the developers who have to wait. Lower returns on millions of dollars could be costly. Let's speed up our tax and fee increases for them.

Richard Heckler 4 years, 2 months ago

What does a boom town economy produce? Wildly inflated values which so so many have learned they cannot sell houses for what they paid. Many today right here in Lawrence,Kansas likely owe more than market value and certainly more than loan value.

What does a boom town economy produce? Wildly inflated property values which in Lawrence is what the local governments are relying on to expand the city limits which of course there is no substantial reason to do so. What it does is INCREASE the cost of Lawrence,Kansas with no significant source of payback. Their only source are existing residents so up come the taxes trash,sewer and water service. The tax to swim in local pools increases etc etc etc.

The icing on the cake. USD 497 decides to blow $20 million on PLAY that did not have exceptional support. USD 497 blew off big time maintenance on existing buildings which adds to the cost as each year passes. Their answer: slumlord approach = let the buildings go to hell and expect taxpayers to approve a bond issue to build more new ones. In fact we have enough buildings to house every student in this city. ( Could this be the westside developers plan to force the population towards their large collection of empty residential and strip malls/) ========= The decisions made in this town without substantial information is troubling. Our government officials are always "planning for the future".

Some of them say "we must take risks". NO is the answer to that. Decisions should be based on information that virtually eliminate risk. Those tools are known as Impact Studies,Market Capacity Studies, Retail Impact Studies,Residential Impact Studies and Cost of Community Services Study.

Richard Heckler 4 years, 2 months ago

Food for Thought:

  • Removed the Chamber of Commerce as the City’s agent for business growth. They should be a player not a decison maker.

Appropriate City Staff should be added to do this, or a contract struck with an independent agent to pursue those ends.

The real estate industry and building industry are very well represented within the Chamber of Commerce. These folks are NOT experts on urban growth. Their primary focus is profit.

  • Lawrence is blessed with nearby agricultural land that is some of the best in the world. This land must be preserved in agricultural uses at all costs, so that citizens of Lawrence will not become shackled to agricultural problems in other regions, dependent upon transported foods. Proposals to rezone ag land should mandate soil testing, and the highest quality land saved to grow our food.

  • Development of all kinds must be sustainable, economically and environmentally.

  • We must pursue policies of environmental compatibility and green development. LEEDS standards should be adopted for new construction and retro-fitting. Policies should be developed regulating the use of fertilizers and pesticides on large-scale farms to avoid pollution of the Kansas River and other bodies of water.

  • For most people, the community they live in is their home before it is anything else. Economic development should recognize this priority and support broad opportunity for a wide range of people to realize their personal dreams and objectives.

Richard Heckler 4 years, 2 months ago

Other Food for Thought

  • Qualified, economic development staff should be hired and be the first filter for any development proposals.

  • Public financing tools of all kinds, tax abatements, rebates, TIF, TDD’s should all be used very judiciously. Some basic standards to even qualify for application need to be established. Mostly Lawrence taxpayers cannot afford tax dollar give aways.

Examples of things that should be taken into account: 1. a company’s history of relocation

  1. whether a company is a direct producer of goods and services or an intermediary conduit, like warehousing

  2. deviation of average wage for production workers from the local living wage standard (administrative salaries should be considered separately)

  3. opportunities for skill enhancement & promotion

  4. the history of charitable contribution to the community

  5. job turnover rates

  6. whether or not the jobs are truly new, or relocations

  7. fiscal viability of the company over time

  8. does the company create & operate , create then sell out or depend on putting existing business out of business( a lose lose lose proposition)

Companies seeking assistance from the City or County should be aware that such assistance makes the community a partner in their enterprise and entitles it to be fully informed and involved in the process.

Development should be in balance with demand. Some small excess of space is advisable to facilitate quick response to need, but it needs to be kept close to known demand.

Richard Heckler 4 years, 2 months ago

No one in Lawrence Kansas has the faintest idea when or if the housing market will ever recover.

Forget about the boom town economy real estate market. It can never be sustained!

Does anyone remember that is what destroyed the nations economy and put millions upon millions upon millions out of jobs,medical insurance and retirement plans.

Richard Heckler 4 years, 2 months ago

When the city commission begins talking about the sewer plant that is usually an indication they are getting itchy to blow $100,000,000 without taxpayer approval. Put this project on the ballot before moving forward.

Maybe septic tanks should be considered billed to the new home owner?

Taxpayers had to approve: funding for the T street maintenance tax( which should have been available in the general budget) * new library funding

Yet on a $100,000,000(million) new project for builders taxpayers are bypassed just like the USD 497 PLAY project at $20,000,000(million).

In the KC Star on the front page a few days residential values continue to decline. Last week on radio news residential market values dropped 3%.

Last night on Nightly Business Report the economy is listed as fragile.

With over 9 million homes on the market and 10,000 in the KCMO metro indicates a buyers market. In the Lawrence market we know a couple that had to shell out $30,000 to get their rather large home sold after being on the market for more than a year. The mortgage lender wanted the balance covered.

Richard Heckler 4 years, 2 months ago

"“If this is the year we start the planning for the wastewater plant, there will be a very significant increase in sewer rates,” Cromwell said. "

Use septic tanks. I don't want my tax dollars spent on something that may not happen.

And I don't want my rates increased for the building industry.

Lawrence needs to find a new source of commerce that pays back the taxpayers instead of one that does not cover the cost of city services.

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