City leaders express support for increasing water and sewer rates by 8.75% next year
photo by: City of Lawrence screenshot
City leaders indicated Tuesday that they were supportive of a water and sewer rate proposal that would increase rates by 8.75% next year, 10.25% in 2024 and 11% in 2025.
As part of its meeting Tuesday, the Lawrence City Commission provided city staff direction on the rate proposal, which has been revised since it was first presented last month, so city staff can prepare utility rate ordinances that will be voted on at an upcoming meeting. The proposal continues significant utility rate increases of recent years, and Vice Mayor Lisa Larsen said those increases have been needed because historically rates have not kept up with costs.
“We’ve got to get those rates up in order to address the issues that we’ve kind of put off over the years, which is unfortunate but we’ve got to do it,” Larsen said.
Larsen added that otherwise, the city could potentially have infrastructure system failures, which end up costing more money to address than heading off issues with regular maintenance.
City staff also proposed a new approach of adopting utility rate increases for three years, instead of just one year, to improve planning. Commissioner Brad Finkeldei did not want to go with the three-year model, saying that he thought there were too many variables, such as inflation, that could impact rates. Other commissioners said they were OK with the three-year model, after confirming with city staff that if expenses or costs change significantly, the commission could amend the rate proposals.
On Aug. 9, city staff proposed increasing water and sewer rates by 8.75% in 2023, 10.5% in 2024 and 12% in 2025. Based on the initial input from the commission at that time, Tuesday’s proposal maintains city administrators’ previously proposed rate increase of 8.75% for 2023, though it spends the rate revenue differently. Proposed rate increases for the next two years were decreased slightly. City staff recommended an 8.75% water and sewer rate increase in 2023, a 10.25% increase in 2024 and an 11% increase in 2025.
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. Rate increases 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 $122 per month in 2023, or by about $85 annually.
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.
Commissioner Bart Littlejohn said he appreciated the changes, including that the proposal lowers the proposed rate increases for 2024 and 2025.
“I think it provides a large amount of flexibility and includes all the things that we asked for,” Littlejohn said.
The ordinances setting the water and sewer rates, as well as the proposals for storm water and solid waste rates, will come back for the commission’s consideration in the fall.
In other business, the commission:
•Deferred a discussion regarding a possible expansion of the city’s limited utility assistance programs. Commissioner Amber Sellers suggested the discussion, and because Sellers was absent on Tuesday, the commission voted to defer the item.
• Voted 4-0, with Sellers absent, to set Nov. 15 as the public hearing regarding economic incentives requested for a planned mixed-use development on the University of Kansas’ West Campus. The KU Endowment project, which is called The Crossing and includes research, residential and retail facilities, is seeking two economic development incentives: Tax Increment Financing (TIF) and a Community Improvement District (CID).
•Continued its conversation about a potential 30-minute limit on general public comment at meetings, updated decorum rules, and changes to how the city handles its consent agenda. City staff told commissioners that after looking at general public comment from 2019 onward, most general public comment was under 30 minutes. Commissioners subsequently came to a consensus that they did not want to place an overall time limit on general public comment, but said they still wanted to move the general public comment period to the beginning of the meeting and update the decorum language. They also agreed they did not want to remove the ability for the public to comment on consent agenda items. The amended resolution will come back as part of a future consent agenda.