Lawrence city leaders say utility rate increases will be needed, but want to look for reductions to staff proposal

Lawrence City Hall is pictured in this file photo.

Lawrence city leaders say they see a need for some level of utility rate increases, but exactly how much residents’ utility bills will go up is still up for debate.

As part of its meeting Tuesday, the Lawrence City Commission provided city staff direction on a proposal to increase water and sewer rates by 8.75% in 2023, 10.5% in 2024, and 12% in 2025. If approved, the bill of a typical utility customer using 4,000 gallons of water a month would increase from $115 to $145, or a 26% increase over the three-year period.

At least a few commissioners indicated they wanted to look at making changes to the number of funded utility projects to potentially lower next year’s utility rate increase. Vice Mayor Lisa Larsen said that while she wasn’t necessarily ready to fund all the projects that the proposed rates would support, many were important.

“This is a real struggle because I look at these projects that are unfunded and I’m just thinking about this idea that we’re trying to play catch-up all the time,” Larsen said.

Larsen said that in addition to addressing infrastructure maintenance, hopefully avoiding full replacement and higher costs in some cases, she was supportive of projects to support additional capacity considering the growth anticipated with the new Panasonic battery plant planned for nearby De Soto.

Commissioner Amber Sellers said she would also like the city to consider expanding its utility discount program. Currently, that program only serves people over 65 with very low income, and Sellers said she’d like to see if it could be expanded to low-income residents regardless of age, people who receive housing vouchers, people with disabilities, and other vulnerable populations. Still, Sellers said she thought having the additional rate revenue to catch up with deferred infrastructure projects was important.

“Although I don’t want to see a rate increase, there is a need for us to not continue to kick the can down the road,” Sellers said.

The city’s three utility funds are enterprise funds, meaning the rates charged to residents are set to cover the personnel, maintenance and other costs of operating the utility service. City staff told commissioners that the rate increases are needed to pay for additional personnel and infrastructure repairs, as well as to account for inflation. The recommended water and sewer rate proposal, called scenario 2, would fund seven positions included in the 2022 rate model to support mandated regulatory upgrades at sewer treatment plants and an additional 12 infrastructure projects not currently funded. The proposal represents a $40 million increase over the five-year duration of the Capital Improvement Plan.

In recent years, the city has been calling for yearly utility rate increases of approximately 6% to 7%, and prior to Tuesday’s proposal, the recommended budget had planned on a 7.5% increase. Commissioner Brad Finkeldei asked what the difference would be if the city were to stick to the 7.5% increase previously anticipated, to see if federal pandemic relief or other funds could make up the difference. Melinda Harger, assistant director of Municipal Services and Operations, estimated that if the city were to stick to only a 7.5% annual increase over the three years, that would be tens of millions of dollars that would need to come out of the city’s Capital Improvement Plan.

Finkeldei said that as the discussion continues, he would like to see how the unfunded projects scored on the city’s scoring system for prioritizing projects, as well as more justification for why the city is calling for funding for some projects. He said that information could be used to potentially lower the increases that are being proposed.

“If we’re looking to bring back something in between, either remove a couple of those (projects) or tell us why they should be there,” Finkeldei said.

The recommended proposal was one of four scenarios for rate increases put forward for consideration, which all fund varying levels of capital projects and sustainability improvements. The other three scenarios have varying levels of increases over the next three years, and all of the scenarios spend some cash reserves in 2023 to lower rate increases and “allow time to revisit expense and revenue assumptions next year,” according to a city memo.

Though the revenue increase associated with any agreed-upon water and sewer rate increases for 2023 will be reflected in the 2023 budget that the commission will approve later this summer, the water and sewer, solid waste and storm water rates will not be officially presented and adopted until the fall.

In other business, the commission:

•Received a presentation on a study of traffic and pedestrian stops, which showed significant disparities in the number of stops, searches and citations between white people and people of color by law enforcement agencies in Douglas County. Findings included that Black drivers in Douglas County were nearly three times as likely to be pulled over as white drivers. The Douglas County Criminal Justice Coordinating Council commissioned the study, which examined more than 20,000 traffic and pedestrian stops that area law enforcement conducted from the start of 2020 to the end of 2021.

•As of 10:45 p.m., the commission was still discussing a resolution to put the question of whether the city should transition to a system with a directly elected mayor and a six-member commission elected by districts on the Nov. 8 general election ballot. All terms would also be changed to four years long.

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