Wichita council: Rise in water rates could be worse
08/28/2012 5:00 AM
09/03/2012 2:43 PM
Wichita City Council members on Tuesday embraced a plan to raise water rates by more than 50 percent over the next 10 years, but congratulated themselves because the increase isn’t bigger.
If the council gives final approval, the overall rate hike will start at 5.8 percent next year and rates will increase every year for the next 10 years, although the rate of annual increases will decline gradually to 3.6 percent by 2022.
In 2013, typical residential customers will see increases ranging from $1.10 to $3.32 a month in their combined water-sewer bill, depending on usage, according to Water Department calculations.
That works out to an increase of about 3.5 percent for small users at 3,000 gallons a month, 2.8 percent for a middle-sized 15,000-gallon user and 2.3 percent for a high-use customer getting 22,500 gallons.
A typical commercial user buying 100,000 gallons a month will see an increase of $32.15, or 7.1 percent, while a large industrial customer will pay 7 percent, or $2,970 more a month, the department calculated.
Commercial and industrial rates will rise faster than residential rates because a consultant’s study showed that businesses were paying less for water than the cost of delivering it to them – effectively about a $3.3 million subsidy from residential to business customers.
The city has committed to closing that gap over time by phasing in larger business rate increases.
The proposed rate increases are substantially lower than the gloomy projections in 2010, when the department was reeling from reduced sales because of wet weather and miscalculations of the cost of paying for city efforts to recharge the area’s groundwater to prevent saltwater intrusion.
“The feedback we received from the council initially on what were double-digit increases, that feedback was taken to heart, as well as what we’ve heard (from the public),” said City Manager Robert Layton.
The utility is on firmer financial ground now because of debt refinancing and a prolonged summer drought that has prompted people to use more water, said Public Works Director Alan King.
Those factors worked out to about an $18.5 million benefit for the utilities, King said.
To keep the rates down as much as possible, the new rate plan envisions a two-year delay on major expansion projects and about a 1.5 percent trim in operating and maintenance expenses.
Mayor Carl Brewer said it’s necessary to keep the rates as low as practical, without threatening the city’s access to water supplies that enable economic growth.
“No one can afford double-digit increases and we have individuals now that are struggling just to make that water payment,” Brewer said. “It is unacceptable to go into the double digits (in increases). But we’re coming up with a plan to gradually kind of follow the recession and follow the seasons and do all these other different things to ease the pain as much as we possibly can.”
In the coming weeks, city officials will be presenting the plan to neighborhood and civic groups, seeking public support leading up to a final vote in November.
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