LARNED — Monday night the Larned City Council met for the first of a handful of budget work sessions leading up to the creation of the budget for fiscal year 2019-2020.
Among the proposals presented by various agencies and organizations was one concerning the need to adjust the city’s water rate.
‘Stable’ water cost for most vulnerable
Stuart Porter with Schwab-Eaton, which earlier this year completed a water distribution study for the city, was on hand to propose water rate adjustments to the council with an eye towards attaining the highest possible scores on grant applications for CDBG funds. This is important because the city plans to utilize grants to pay for the replacement of the majority of the 100-plus-year-old water distribution system over the next several years. To do this, the city needs to show it is charging at least the minimum fee for water as similar communities in the state.
But, council members were concerned any increase could prove to be a hardship for residents on fixed incomes, particularly low-income senior citizens.
Of the three options presented, Option 1 would not make the city eligible for grant funding.
Option 2 included a base rate of $18.24, with a fee of $3.16 for the first 1,000 gallons and a fee of $34.04 for 5,000 gallons, and would provide an annual revenue of $1,033,280.
Option 3 included a base rate of $14.30, a fee of $3.94 for the first 1,000 gallons, and a fee of $34.00 for 5,000 gallons, and would provide an annual revenue of $1,102,600. It was determined that Option 3 provided the most protection from increase for the most vulnerable water customers, while also increasing the city’s revenue by $69,320. This was the option the council agreed it would move forward with when preparing the budget.
It was decided this year that rather than saddle current residents with a $4.5 million bond issue to replace the system, the city would undertake a pay-as-you-go plan. The council felt it would be more fair since the system had fallen into disrepair after decades of deferred maintenance. The plan will depend on increasing the city’s water rate to customers in order to build reserves needed to provide matching funds for grants, which are typically awarded under the condition of a 50-50 split.
Porter broke down the timeline for the next round of CDBG funding. The deadline for application is Sept. 28, with funds awarded in January 202. There is a six-month design window for the project, with bidding beginning the second half of the year with work to start in 2021. It may take multiple rounds of grants to complete the project this way.
Pool surcharge will create a reserve for future maintenance
Another billing consideration discussed was the need and impact of a proposed pool surcharge to all residential customers. Mayor William Nusser and Erin Atteberry from the community pool advisory committee stressed the surcharge will not provide the funding needed to solve the issues at hand now with the pool. It is intended to create a reserve for future repairs and maintenance for the future pool so the city avoids finding itself in the same position years from now.
The surcharge would be modeled after the surcharge the City of Hoisington currently charges utility customers each month, in exchange for providing a free annual pool pass to community members who apply for one each year. There is no exception, but in recent years, Hoisington City Council members have continued to endorse the surcharge noting complaints are few and the intangible benefits to the community are many.
Four options were presented, along with the yearly impact for residents and the revenue that would be raised.
Option 1 was for no surcharge, with each additional option upping the surcharge by $1. After some discussion which included possible methods of implementation of the pool pass program and considerations about how other recreational offerings could be impacted, there was consensus among council members that Option 4, a $3 monthly pool surcharge that would raise approximately $57,000 a year would be included in the budget proposal.
It was agreed efforts would need to be made to make sure the public understands the difference between the use of the reserve created by the surcharge and the separate efforts to raise funds for a major pool project in Larned’s future.
Over the course of several meetings in April, May and June, the pool advisory committee and the city determined that for now, the city needs to prioritize the water distribution system, but grassroots efforts to raise funds for the pool are encouraged, and an account to hold funds specifically for that purpose has been agreed upon, freeing groups to engage.
It was estimated last year the pool project could cost between $800,000 and $1.2 million depending on if the city chose to renovate or replace.