Wheatland raises water rates for G.C.

6/19/2013

By SCOTT AUST

By SCOTT AUST

saust@gctelegram.com

Garden City water customers could face a $5 per month increase in a few months due to a water rate increase handed down to the city by Wheatland Electric Cooperative.

The city pays Wheatland to treat water from Garden City's wells through Wheatland's reverse osmosis plant, and also buys about 3 million gallons per day of Wheatland's water to blend with the water the city provides to customers.

Mike Muirhead, public utilities director, told the Garden City Commission on Tuesday that Wheatland recently conducted a cost-of-service analysis of its water utility and decided the electric side of its business had been subsidizing the water side for some time. Wheatland now wants to end that subsidy.

As a result, Wheatland is raising the rate Garden City is charged for water treated and water purchased by 39 percent effective Aug. 1, which will mean a $505,000 annual additional cost to the city.

"The water fund cannot absorb a $505,000 annual increase," Muirhead said. "Since Wheatland's water utility isn't governed by the KCC (Kansas Corporation Commission), they can basically do whatever they think is best for their business interest."

Passing the increase on to customers would mean about a $5.15 per month increase in the base water rate charged to the roughly 7,240 residential customers and about 1,000 commercial customers in Garden City.

"I don't mind a little increase, but a 39 percent increase is a little steep all at one time," Mayor Dan Fankhauser said.

The city signed the initial water supply and treatment agreement with Wheatland in 2001.

Muirhead said the increase being passed on to the city is in the base charge, so it won't fluctuate depending on use. To recover the cost, the city could tack on a fixed amount to everyone's bill, or it could recover them with a per gallon rate in which people who use more water would pay more, he said.

Another option may be to adjust water rates factoring in the Wheatland expense, as well as a "more robust" capital improvement plan for dealing with some of the water main issues in the water system that have caused complaints about rusty water.

"I'd like to see all options," Commissioner Chris Law said. "It would be good for the community to see everything."

Garden City produces and consumes 2.1 billion gallons of water per year, Muirhead said, water that is extremely hard. As demand grows, the city will need to do something to soften the water in some way, whether it is by continuing to contract with Wheatland or purchasing soft water somewhere else.

"Long term, I think we need to set a more strategic plan," he said.

In response to a question about buying out Wheatland's reverse osmosis plant, Muirhead said Wheatland indicated it could be open to the idea, but the sale would be at a market rate. He said he doesn't know at this point what the market rate cost would be to purchase a reverse osmosis plant.

Commissioners asked Muirhead to research potential options for dealing with the issue and present them at a future meeting.

In other business Tuesday:

* Commissioners approved an exemption in implementing a state law allowing people with concealed-carry permits to carry firearms into public buildings. The law goes into effect July 1, but allows cities and counties to get a six-month exemption until Jan. 1, 2014, to allow time to prepare a security plan for public buildings and decide whether to seek a four-year exemption of the law for some or all public buildings.

* Commissioners approved a waiver to city ordinance that prohibits discharging fireworks within the city limits to allow fireworks from July 3 through 5 between the hours of 10:30 a.m. and 10:30 p.m.

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