Council OKs 3 percent hike in sewer rates
Everyone has to pay bills on time, including the city of Basehor.
The city council narrowly approved, 3-2, a 3 percent increase last week to the city's sewer treatment rates.
President John Bonee and Iris Dysart were against the increase. Mayor Chris Garcia broke the tie vote. Council member Terry Thomas was not present.
The current rate is $6.99 per 1,000 gallons. A 3 percent increase will put rates at $7.20 per 1,000 gallons -- effective May 1.
City Administrator Carl Slaugh said the increase is necessary to pay off the existing loan for the current wastewater plant as well as fund much-needed improvements to the plant.
"Anytime we raise rates it's always a difficult thing to do," he said. "KDHE (Kansas Department of Health and Environment) required that we do a rate study to make sure we could pay for the additional financing we have to have for the expansion."
Slaugh said the rate study, performed by Larkin Group in August, helped the city sort out its financial situation regarding the sewer fund and the city's ability to fund between $4 million and $6 million in improvements to the plant. The city is currently paying off a KDHE revolving loan it took out for construction of the wastewater plant, which was completed in June 2001. The loan was originally issued in June 2000 with payoff planned for Sept. 1, 2020.
He said the previous financial officer for the city put together a payment schedule, which showed wastewater treatment rates increasing by a small percentage each year. The steadily increasing rates will help pay off the existing loan's balloon payments, which also increase over the years.
"The payments that we make on our revolving fund loan increase over time," he said. "If we don't raise the rates, we won't be able to make the payments."
Council member Dysart said she was concerned about increasing sewer rates.
"I feel like we should stay with the $6.99," she said. "I would prefer not to vote for any increase. I think we should have the increase when it's determined for sure what it's going to cost us."
The current balance on the KDHE revolving loan is $6,518,450 with annual interest and principal payments of about $488,000, Slaugh said. Over time, the annual payments increase to $779,130. Within two months, the city will also start seeing additional engineering fees for plant improvement designs. The wastewater treatment plant project costs, Slaugh said, could add another $195,000 in annual payments in the beginning and $800,000 by the end of the payoff term.
The city has already fallen behind the payment schedule, when the council voted not to increase rates last year.
"If we don't keep up with that increase schedule, not only will we not be able to make the payments, we won't have the money to make operation and maintenance payments," Slaugh said to the council. "It just places us further in jeopardy of what we already have committed."
Slaugh did not leave out the fact that revenues from utility billing actually increased 16.5 percent from 2005 to 2006, but said this is most likely due to an increased customer base. It increased from 1,259 in 2005 to 1,378 in 2006.
"What I'm pointing out is that we did see an increase in revenue mostly because our customer base has increased," he said. "I'm not trying to hide that we're making more money, but our expenses are also going to significantly increase."
Bonee searched for a solution to raising the wastewater treatment rates. He suggested taking funds from other areas of the budget to help with payments.
"If you're going to try to make up for all the lack of progress, we're going to run everybody out of town," he said. "There is no reason why we can't take revenue from other streams. We need to pull other funding into this."
However, Slaugh said that while the council has the authority to take from other funds to subsidize the sewer, it is not something he would recommend. The city collects fees for building permits, which go into the general fund. Funds are transferred out of the general fund into other areas. Slaugh said taking from other funds will ultimately leave less money for other city projects such as road improvements.
"There is a perception that our rates are a lot higher than anywhere else," Slaugh said. "Ours are not by any means that much higher than communities that are in the same situation as us. This would put us in a better situation than if we don't increase the rates. I still don't think this is unreasonable to be self-sustaining."
Council member Keith Sifford agreed with Slaugh saying that while the council doesn't like to raise rates, it is necessary for the future of the city.
"I think that this is probably going to be necessary," Sifford said. "Any further delay will put us behind. The necessary funding is going to be essential as the time comes. It's a hard pill for everybody to swallow, but I don't think people were naÃive that this was going to cost money."
In other action, Thursday night the council:
- Agreed, 4-0, to authorize the use of a sewage lift pump for handicapped-accessible restrooms at 2812 N. 155th St.
- Approved, 4-0, reappointment of Jeff Scherer and Bill Robinson to the Board of Zoning Appeals. David Roe requested he not be reappointed, leaving a vacancy on the board.
- Approved, 3-1, with Dysart opposed, the adoption of personnel policy, Article O. Purchasing Cards.
- Approved, 3-2, with Sifford and Bonee opposed, the adoption of personnel policies, Article P. Taxable Fringe Benefits and Article Q. Cellular Telephone Use. Mayor Garcia broke the tie vote.
- Approved, 4-0, the Planning Commission's recommendation to deny the change of zoning from I-1 Light Industrial to I-2, Heavy Industrial for 2221 N. 147th St., as requested by jerry Presley.
- Approved, 4-0, the recommendation for joint city-county road improvement priorities.
- Approved, 4-0, job descriptions for Police Clerk -- level II and Receptionist -- level II.
- Approved, 4-0, condemnation of 147th Street for improvement.
- Met in executive session for 15 minutes to discuss matters covered by attorney-client privilege.
More like this story
- Kansas properties nominated for national historic register
- Archaeologists from across US searching for Kansas artifacts
- Society explains lack of action with Basehor's 1905 library
- Court rules with city of Basehor in wrongful termination suit
- Justice Department sues KCK Housing Authority, former worker