Current Poll
| PUA sets water rate for Paola & Louisburg |
 |
 |
 |
| News | |||
| Written by Brian McCauley | |||
| Friday, 17 July 2009 08:00 | |||
|
Paola and Louisburg now know how much they’ll be paying for water from the Marais des Cygnes Public Utility Authority, but with the uncertainty surrounding two current water district customers, the ultimate effect on the bottom line is yet to be determined. Representatives from both cities gathered Wednesday in Paola for the PUA’s annual board meeting. The officials are working out the final details of a more than $30 million water project, which includes a new water plant built along the Marais des Cygnes River and set to go on line next month. Some of those final details include figuring out at what rate the cities need to buy water from the PUA and how it may be possible to keep Miami County Rural Water District No. 1 buying water from Paola and Miami County Rural Water District No. 4 buying water from Louisburg once the price goes up when the new plant begins operating. Paola City Manager Jay Wieland said Paola currently sells water to RWD No. 1 for $2.56 per 1,000 gallons, and Louisburg City Administrator Jeff Cantrell said Louisburg sells to RWD No. 4 at $3.27 per 1,000 gallons. Both cities have long anticipated paying more than $4 per 1,000 gallons from the PUA, with a majority of that required to pay off their debt. The officials also noted that the water districts likely could buy water from Miami County RWD No. 2 or Osawatomie for about $2.50 per 1,000 gallons. Louis Funk of Bartlett & West Engineers organized a spreadsheet to show PUA officials water rate options Wednesday. If both water districts remain customers once the rates increase, something the board members did not think was realistic, the cities would buy the water from the PUA at a rate of $4.07. Without the water districts, that rate jumps to $4.49. Funk said the cities had the option of selling the water to the rural water districts at a reduced rate because it would lower the rate in which the cities need to buy from the PUA, and it would help the cities pay off capital expenses that will have to be paid whether the districts are customers or not. Funk said the fixed and variable cost of producing water at the new plant is only about $1.23 per 1,000 gallons. With this in mind, he said Paola and Louisburg could sell water to the water districts for $2.50 per 1,000 gallons in an attempt to keep them as a customer. If the cities chose to do that, they could buy water from the PUA at a rate of $4.26 per 1,000 gallons. The topic was brought up at Tuesday night’s Paola City Council meeting, and Councilmen Jack Rowlett Jr. and Pete Bell were strongly opposed to selling water to the rural water districts for less than what the cities would be buying it for from the PUA. Wieland said Wednesday it would be a hard sell to the council and he instead suggested having the PUA sell water directly to the water districts as wholesale customers. Funk said that could be a complicated process, with it taking up to a year to work out. After further review of the spreadsheet, PUA board members Wednesday also realized they needed to add 9 cents to the projected rates because the expected earnings from interest on the money in the debt reserve fund was too high. The anticipated rate was dropped from 3.5 percent to 2 percent. Eventually, board members agreed to set a rate of $4.16 per 1,000 gallons for Paola and Louisubrg to buy water from the PUA. The rate was obtained by taking the $4.07 and adding 9 cents for the change in anticipated interest earnings. Although $4.16 would be the official rate, Funk said the cities would budget as if the rate was $4.35 if they chose to sell water to the rural water districts at $2.50 per 1,000 gallons. The difference would be the loss the cities would incur from selling the water at a reduced rate. The only official decision made on the rates Wednesday was to approve the $4.16 cost for the cities to buy from the PUA.
Set as favorite
Bookmark
Email This
Hits: 677 Trackback(0)
Comments (0)
 Write comment
You must be logged in to post a comment. Please register if you do not have an account yet.
|
TrackBack URI for this entry
Subscribe to this comment's feed
