Hillsboro water rate increase contextualized

Last week, the Hillsboro Free Press reported on a significant increase in raw water rates for the City of Hillsboro. This week, City Administrator Matt Stiles and Senior Water Treatment Technician Morgan Marler explained what the increase means for residents.

Stiles said the increase was not unforeseen, as the city had a 40-year contract with the Kansas Water Office, which sets rates and sells water rights in the state. The initial contract was 10 cents for every 1,000 gallons. That rate has jumped to 46 cents per 1,000 gallons. The increase in raw water costs will jump from $15,000 annually to $69,000—a 460% increase.

How they get to that is a mystery,” Stiles said, adding the city will likely have to enter into a variable rate contract rather than another long-term fixed rate contract.

Stiles said the Kansas Water Office manages water in the state under the Army Corps of Engineers, “and we’s stuck dealing with them because they control it.”

Roger Holter, city administrator for Marion, said his city also sources raw water from the reservoir. Marion has water rights of up to 19 million gallons at $11,875 per year, plus water protection fees of up to $5,000 annually.

Holter said the City of Marion’s contract is due to expire within months of Hillsboro’s.

We’re both facing whatever the state says,” he said.

In addition to a surface water contract, the City of Marion also holds 2.5 million gallons of groundwater rights for $4,500 annually, “as a backup.” However, according to Holter, Marion has not utilized groundwater rights for about eight years.

Stiles said the city “does not have a ton of room to negotiate” regarding the increase in costs. However, Marler and Stiles noted water quality has decreased, and it may give the city some leverage.

The reservoir has been having extreme bluegreen algae blooms since 2003, and those blooms have toxins associated with them that are not regulated contaminants by the EPA. We still have to remove them to keep our residents safe, so we estimate that we have an additional 55 cents per 1,000 gallons that just goes to treating bluegreen algae toxin problems coming from the reservoir,” Marler said.

Marler said the algae is “a direct result of increased nitrogen and phosphorus entering the reservoir in the watershed due to farming activities.”

The City of Hillsboro does not have wells, and Stiles said transitioning to groundwater “when you do the math, it doesn’t make sense to look at a well supply.”

When it comes to consumption, Stiles said Hillsboro is allocated rights of up to 300 million gallons per year, with a 150 million minimum purchase. However, the city typically uses around 120 million gallons of water annually—60% residential, 37% commercial and 3% city use. There is no distinction between commercial and residential accounts in billing, with a base charge of $29 and then $4.92 for every 1,000 gallons.

Stiles said it costs about $2.95 to pump, process and clean 1,000 gallons of raw water, and the increase in the hard cost of water could add 36 cents per 1,000 gallons to production costs.

Stiles said the city may reevaluate the base costs.

That helps pay for overhead, maintenance and distribution and fixed costs,” he said.

The increase in water costs represents 6% “of the total costs to pump, treat and all the distribution and monitoring and compliance with KDHE,” he said. However, the water utility accounts for about 13% of the city’s budget.

Stiles said utilities must not only be self-sufficient, but “we treat them like a business; they generate enough money to keep themselves going, and they help support other operations in the city when it makes sense.”

Marler said every drop of water that comes from the reservoir must go through treatment to remove solids, filter the water, and use chlorine to kill viruses and other pathogens.

We have a pretty detailed water treatment plant. We have quite a few processes that are monitored continually. We run 24 hours a day, and have 150 alarms pre-set into the system that will check different water quality parameters,” she said.

In addition there are analyzers from the Environmental Protection Agency and Kansas Department of Health and Environment to ensure regulations on water quality is being met.

Stiles said, when it comes to the price of water at the tap for consumers, the city tries to build in small increases to prevent major sticker shock.

However, with the push from the supplier for an adjustable rate contract, Stiles said there may be “small variations” each year to water costs.

Ultimately, however, it will be a city council decision to set the new water rates for residents.

We’re going to deliver a high-quality product in the most economical way,” Stiles said. “I know 460% sounds like a lot. At the end of the day, when we factor it out, it won’t be much. There will be some rate adjustments that have to happen, but we are trying to make those the most responsible way to move us forward and cover costs and plan for the future.”

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