Print edition: 
Miscalculations by Wichita Water Utilities officials may force an immediate 15 percent rate hike for hundreds of thousands of people in the city and in surrounding communities that buy its water.
And yet more increases would be needed in coming years, though it's unclear how steep those would be.
Shortfalls have also endangered a $550 million aquifer recharge project that officials say is vital to the region's future water supply.
The revelations came in a somber news conference at City Hall on Thursday afternoon, and followed the abrupt resignation of utility director David Warren earlier this week.
City Council members will have to vote on the increase in coming weeks. But they said they're deeply frustrated because they have few options and little time.
If the city doesn't shore up the water utility's finances, it won't have enough cash to cover expenses and won't be able to issue future bonds to pay for important projects.
It expects to draw $8 million more into its coffers through rate increases that, if approved, would start June 1.
Residents who use very little water — about 3,000 gallons — would see bills climb from about $26 to $29 a month. High-use residential users would see a nearly $18 monthly increase.
Commercial businesses that use about 100,000 gallons would see a $52 hike. Industrial users who consume 10 million gallons a month would see a nearly $5,000 jump, according to city calculations.
Council members cringed.
"At a time when we haven't fully recovered — certainly haven't even begun our steady climb out of this recession — it's going to be more frustrating news on top of an already burdened community," council member Jeff Longwell said. "I'm every bit as frustrated as they are."
Lax financial planning
City Manager Robert Layton said finance officials began questioning the utility's finances in December, conducted a review in late January and found that the utility was in dire shape.
Layton said several factors contributed to the problems.
* The utility, which makes money selling water, used inaccurate projections of future water use. Water officials projected customers would use 59 million to 63 million gallons of water a day. It turned out customers consumed about 55 million gallons.
Overall, consumption has declined about 13 percent since 2006.
Layton attributed that in part to rainy years that led to less watering of lawns and in part to the poor economy.
"We were not conservative enough in estimating the impact wet weather would have on consumption," he said.
* The utility also used a flawed formula in planning its debt payments, a city report on the issue said.
The utility tried to schedule larger payments near the end of its debt payments to take some of the burden of future projects off of today's customers.
But it didn't plan enough cash flow in the first 10 years of debt payments to cover the bills.
* When developers agree to pay for sewer pipes to serve new subdivisions, the city sometimes pays to increase pipe size to account for future growth. Normally, the city spends about $2 million a year to cover the difference between what developers need and what the city thinks is smart for future growth.
The past two years have seen $20 million worth of such spending.
* The utility has to keep cash reserves to maintain a good bond rating so it can sell its debt on the market. It has drained those and now needs a big cash influx.
Mayor Carl Brewer said he supports Layton's ideas for independent review of the utility and add oversight to its finances.
He also called for a "blue-ribbon panel" of people with financial expertise, experience with water utilities and civic involvement to give insight and critical feedback on the utility.
Some of the problems were foreshadowed in July when Warren asked the council to approve an emergency $2 increase to the base charges of water bills in order to protect the city's AA- bond rating.
Frustrated council members approved the hike despite concerns about adding to the bills of financially-strapped families and businesses.
They approved a 5 percent increase to the water and sewer rates that took effect Jan. 1.
Warren said the council would likely be asked to adopt 5 percent hikes to for the next three years followed by 3 percent increases through 2017.
Meanwhile, the utility tried to trim its budget by cutting $8.9 million in projects, laying off 19 employees and holding another 19 positions open.
It wasn't enough.
Shared blame
Layton and some council members didn't lay the blame on any one person or tie Warren's resignation directly to the utility's problems.
But the connection was obvious given that part of the solutions Layton called for was a change in management.
Warren, 59, couldn't be reached for comment Thursday. On Wednesday, he declined to comment on specifics about the utility.
"All I can tell you is I've retired," he said.
Public Works Director Chris Carrier will take over in the interim while the city seeks a consultant to manage the utility while the city conducts a nationwide hunt for a new director.
In addition to replacing Warren, Layton is moving the utility's finance officials out of the water utility into the city's finance department.
Longwell acknowledged there were issues with Warren, but said people should be careful not to demonize him.
"We shouldn't throw out all the good he did for this community over the last 20 years when we had dependable, clean, potable water that enabled us to grow much better than most communities," he said.
Aquifer's future
The Equus Beds Aquifer Storage and Recovery Project — or ASR — is considered a major source of the Wichita region's water supply through 2050.
It's also the biggest factor in why the city has called for water rate increases.
The project, which has received numerous awards, captures water from the Little Arkansas River, treats it and injects it into the Equus Beds aquifer, where it is stored for future use.
Local, state and federal officials have promoted the project and received grants and other government funding.
Now Layton said the city will freeze future contracts and analyze existing construction projects, though he said canceling current contracts may not be worth it since it could trigger costly penalties.
Council members largely voiced confidence in what the recharge program has done to date, but some said they want more analysis of future phases of the project.
Council member Janet Miller said the city can't let itself become like many other cities nationwide that struggle to provide water.
"To do nothing is not an option," she said.
