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Archive for Thursday, May 31, 2012

Water plant moving forward

May 31, 2012

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A $16 million project to build a water treatment plant just outside of Lawrence along the Kansas River is moving toward construction.

The leader of Public Wholesale Water Supply District No. 25 confirmed his organization has received a necessary federal loan and has begun buying property for the plant.

The plant currently is scheduled to supply water to Douglas County Rural Water District No. 5 and Osage County Rural Water District No. 5.

“We’re excited,” said Larry Wray, who is the president of the wholesale water district and also serves as the administrator for Douglas County RWD No. 5. “We think it will be good for our two water districts, but we think it will be good for the whole region, too.”

The project — which will involve laying about 30 miles of waterline — could have impacts on the city of Lawrence’s water operations. The city currently provides treated water to Douglas County RWD No. 5. When the new plant comes on line — likely in the next four years — Lawrence will lose most of its sales to Douglas County RWD No. 5. Historically, the water district has been about the fourth-largest purchaser of treated water from Lawrence.

But Lawrence leaders also will be watching whether any other large water customers of the city join the new wholesale water district. Baldwin City currently is Lawrence’s second-largest purchaser of treated water, and leaders there have been frank about concerns Lawrence is charging too much for its treatment services.

“I have heard Lawrence City Manager Dave Corliss say his directive is to be the Walmart of water,” said Baldwin City Administrator Chris Lowe. “But what I’ve gathered from my elected officials who have dealt with Lawrence in the past, it hasn’t been the Walmart of water. It has been the Neiman Marcus of water.”

Plant plans

The proposed wholesale water plant would give large water users, like Baldwin City and other rural water districts that currently purchase from Lawrence, more water options than they’ve previously had.

Wray said the wholesale water district recently finalized purchase of nearly 3 acres near the Kansas River between Lawrence and Eudora. The property is just north of North 1500 Road and east of East 1625 Road.

The 3-acre site will house one of three well fields that will be recharged by the nearby Kansas River. Wray said the wholesale water district will be exercising options to purchase other property in the near future.

All this comes after the wholesale district recently was notified it had received its financing through USDA’s Rural Development program.

The project has been six years in the making. The new district will serve a significant geographic area. Douglas County RWD No. 5 serves large parts of western Douglas County south of Clinton Lake and into northern Franklin County. Osage County RWD No. 5 serves the area around Overbrook, Carbondale, Scranton and the north shores of Pomona Lake.

Wray said his board on Douglas County RWD No. 5 decided to become a part of the wholesale district because of a history of price increases from Lawrence’s water service. For several years in the last decade, Lawrence increased its wholesale water rates by more than 15 percent, oftentimes much more than prices increased for retail customers inside the Lawrence city limits.

“We think this project will give us better control over our pricing for the long term,” Wray said. “It will take awhile to the plant paid off, but we’re really looking at what is best for the district over the next 40 to 60 years.”

Contract negotiations

Lawrence City Manager David Corliss said his office will continue to negotiate new contracts with several of the city’s largest outside water purchasers.

Corliss said that includes negotiations with Baldwin City. Corliss said he is set to recommend to city commissioners that wholesale water rates be decreased in 2013 in order to help make the city more competitive among wholesale customers.

“I think we will be in a position to recommend a fairly substantial rate reduction to wholesale customers,” Corliss said. “We understand we have to justify our costs to them.”

The city relies on wholesale water customers to help pay for a major expansion of the Clinton Water Treatment Plant that was completed about six years ago. The approximately $15 million expansion was built with the idea that the city would continue to be a major player in the wholesale water business for years to come.

Baldwin City officials said they expect to make a decision on whether to renew their contract with Lawrence by September. Baldwin City has been approached by the new wholesale water district.

But Baldwin City Mayor Ken Wagner said Baldwin is more focused in participating in a possible project to create a wholesale water plant at the former Sunflower Army Ammunition Plant in De Soto. Wagner, though, said a proposal to remain with Lawrence also will receive serious consideration.

“With the Sunflower deal, we would have a seat at the table, and that would be a big thing,” said Wagner. “But Lawrence has changed its attitude toward us recently, and that has been appreciated. They have extended an olive branch.”

Comments

nativeson 2 years, 6 months ago

This situation was created by years of ignorance about wholesale water rates and the market. The City did not look at its competitive position with pricing and simply passed through increasing costs to surrounding districts. Now the City will need to figure out how to operate this utility with less volume in the future.

Richard Heckler 2 years, 6 months ago

Seems like a reckless water management problem at city hall. Now will Lawrence city dwellers see another water rate increase(Tax Increase) to make up for lower rates elsewhere?

"The city relies on wholesale water customers to help pay for a major expansion of the Clinton Water Treatment Plant that was completed about six years ago. The approximately $15 million expansion was built with the idea that the city would continue to be a major player in the wholesale water business for years to come." Hmmmmmmmm

Spending $15 million based on speculation before substantial long term water contracts were secured seems reckless to me.

I'd say these customers are gone. They have obviously found a way to serve themselves in a more fiscally responsible fashion.

John Kyle 2 years, 6 months ago

"But Baldwin City Mayor Ken Wagner said Baldwin is more focused in participating in a possible project to create a wholesale water plant at the former Sunflower Army Ammunition Plant in De Soto."

Ew. Sounds like a great place to get water from.

just_another_bozo_on_this_bus 2 years, 6 months ago

The complaints about the city's handling of water sales may very well be valid, but my guess is that building their own water processing and distribution infrastructure will raise the water rates for their customers, not lower them.

kansas21301 2 years, 6 months ago

It will not allow lawrence to gouge rural customers because they are the only ones with access to the kansas river though....in the long term it will make lawrence customers pay more but this is only fair.. rural customers won't be overcharged to help pay for cheap lawrence water anymore

kansas21301 2 years, 6 months ago

you guarantee huh? economies of scale? I'm not sure you understand what your talking about. It's simple ...think of it like owning your water source instead of renting water from the city of lawrence...in the long run it makes way more sense.....Rural customers already pay way more for the same water out of the kansas river

littlexav 2 years, 6 months ago

Why would you want to build a water well at the toxic dump otherwise known as the Sunflower Army Ammunition Plant? That would be like building an air factory at the top of a power plant smokestack.

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