Kansas City’s costly water bills sock customers while upgrading services

Forget the cake and balloons because this is not a cause for celebration: On May 1, the Kansas City Water Services Department put in place the most costly sewer rates in the metropolitan area.

The total average residential charge is $53.35 a month, 55 percent higher than three years ago.

Add in water charges and — as the accompanying chart shows — Kansas City’s total water services bill of $99.30 a month is easily the highest among the metro area’s largest utilities.

Kansas City likely won’t be knocked from that perch, either. Expected increases over the next five years could drive the total bill over $150 a month.

Sure, this unwanted distinction has been expected for years, especially after the city approved an agreement with the Environmental Protection Agency to reduce sewage overflows into local waterways at a cost of up to $5 billion. The city also has embarked on an ambitious plan to spend roughly $30 million a year to replace aging water lines.

But all of these expenses have to come from somewhere. Kansas City’s extremely high bills are affecting the pocketbooks of more than 650,000 local residents, including those served by the utility in Johnson County.

Some already have cut back on water use. The city has seen a decline of about 25 percent in the last 15 years, partly because of more efficient toilets and appliances. Reducing water use may help customers pay the bills, and conservation is certainly an added benefit. Still, the city will have to collect enough money to make improvements.

Many customers will have to stretch their budgets to pay for the basic necessity of water services, reducing expenses in other ways. That’s going to be more difficult to do for thousands of lower-income residents.

Finally — and this especially concerns city economic development officials — potential homeowners and businesses could look at their prospective bills and go elsewhere. Where’s the tipping point?

While customers notice the higher bills, the water department must keep building the case that it is properly and efficiently spending those funds to provide modern water and wastewater infrastructure.

City officials offer mostly reasonable explanations for their costly monthly charges.

The city’s systems are much larger and often much older than others in the area, with too many leaks. The city has to maintain water and sewer infrastructure that goes by plenty of vacant houses that don’t produce any revenue. The city also has high delinquency rates because of customers’ inability to pay.

And that EPA mandate on sewer upgrades is “the 800-pound gorilla” other utilities don’t yet face, as Olathe spokesman Tim Dannenburg put it.

Unfortunately, some of Kansas City’s current woes were self-inflicted. Most notably, the City Council in the early 2000s froze water rates for several years. The action was sold as a boon for customers, but it also starved the department of funds to reinvest in needed upgrades.

In more recent times, the city’s rates have gone up rapidly because elected officials responsibly have approved rate increases sought to replace water lines and meet the EPA’s mandate.

Sean Hennessy, chief financial officer for the water agency, says he’s concerned about when customers could reach “rate fatigue.” And department director Terry Leeds expects more outcry from customers as even higher wastewater rates kick in.

Moving proactively, the city later this year plans to begin reviewing other ways to help pay for some future projects. Other options include slightly higher sales or property taxes.

But almost any solution other than continuing to boost rates could require a public vote. That could turn into an interesting referendum on just how much Kansas Citians are willing to pay for these basic services.

This story was originally published May 16, 2015 at 10:00 AM with the headline "Kansas City’s costly water bills sock customers while upgrading services."