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City leaders will soon consider a revised water and sewer rate proposal that maintains city administrators’ previously proposed rate increase of 8.75% for 2023, though spends rate revenue differently. Proposed rate increases for the next two years have been decreased slightly.

As part of its meeting Tuesday, the Lawrence City Commission will receive the revised rate proposal and provide direction to city staff as they prepare the utility rate ordinances for 2023, and potentially for 2024 and 2025 as well. Following initial input from the commission last month, city staff are now recommending an 8.75% water and sewer rate increase in 2023, a 10.25% increase in 2024 and a 11% increase in 2025.

The new proposal represents no change to the rate increase previously proposed for 2023 and a slight decrease to those previously proposed for 2024 and 2025. On Aug. 9, city staff proposed increasing water and sewer rates by 8.75% in 2023, 10.5% in 2024 and 12% in 2025. Rate increase for 2023 for the city’s other two utility rates, solid waste and storm water, have not yet been proposed, but using the 2022 rate models — which could increase under the 2023 proposal — the utility bill of a typical customer using 4,000 gallons of water per month would increase from about $115 per month in 2022 to about to about $122 per month in 2023, or about by $85 annually.

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. At the August meeting, commissioners said they would like to look at ways to reduce the city staff proposal, but only identified one cut to help accomplish that. Specifically, commissioners asked to eliminate $8.15 million allocated for the second phase of an effort to improve the taste and odor of drinking water from the Clinton Water Treatment Plant. However, commissioners also said they were interested in using some or potentially all of that $8.15 million to pay for sustainability improvements not covered by the original city staff recommendation.

The revised city staff recommendation uses almost all of those dollars, or $8.1 million, toward sustainability efforts related to three capital improvement projects: $4.7 million at the new Field Operations Campus; $3 million for upgrades at the Kansas River Wastewater Treatment Plant; and $400,000 related to utility vehicle replacements.

City staff also proposed a new approach of adopting utility rate increase for three years at a time to improve planning. Commissioner Brad Finkeldei previously questioned the approach given the current financial unknowns, including inflation and pending city requests for infrastructure grants that could help offset the need for rate increases. City staff state in the memo that the proposal represents a gradual rate increase and would give the commission the chance to revisit rates next year to see if cost factors impacting future revenue needs have changed. Staff also state that if commissioners only want to adopt rates for 2023, that they would need to adopt a 10% water and sewer rate increase instead of the 8.75% increase to ensure all projects in the Capital Improvement Plan receive funding.

In other business, the commission will also discuss a possible expansion of city utility assistance programs. In the face of rising utility rates, commissioners said they were interested in looking at ways to expand the very limited assistance currently provided, as the Journal-World recently reported.

The city’s utility discount program currently serves residents 60 and older with very low income, and about $60,000 annually is used to provide a 65% discount to 75 households through that program, according to a city staff memo. Another program created last year is funded by donations from other utility customers, and has provided one-time utility assistance to 10 people so far, for a total of about $3,700 in assistance.

City staff explored two ways to expand utility assistance: using federal pandemic relief and using general fund dollars. The memo states it is unclear if federal pandemic relief can be used directly for utility assistance, and therefore city staff is seeking direction regarding whether the commission would like to use general fund dollars to expand the utility bill discount program. The city estimates it would cost $676,716 annually — which includes $67,500 for a new city position to run the program — to expand the discount program to residents of all ages under the same income eligibility used by the Low Income Energy Assistance Program (LIEAP). LIEAP is a federal program that provides a one-time per year benefit to households making 150% or less of the federal poverty level. The city estimates about 700 households would receive a utility discount if the city were to expand the program to all residents in that income range.

The Lawrence City Commission will convene at 5:45 p.m. Tuesday at City Hall, 6 E. Sixth St.