Jul. 15--If the city raises water rates for its most consistent group of customers by 21 cents per thousand gallons, it could close its budget gap.

But the move would be expensive for some of the city's biggest employers.

Council members asked the water utility to look at increasing usage rates as an alternative to a proposed $2 surcharge and 5 percent usage hike.

Water officials say increases are necessary to continue a project aimed at recharging the Equus Beds aquifer north of Wichita to give the city water through 2050.

The increase is also needed to maintain the utility's AA- bond rating, which affects its borrowing rate on multimillion-dollar projects.

Under the scenario presented Tuesday, "block one" rate users -- those who don't sway more than 10 percent above their average monthly usage in the winter -- would see their rates go from $1.17 per 1,000 gallons to $1.38.

For many people that would be less than $2 a month.

But for big industrial businesses, it could mean tens of thousands of dollars.

Spirit AeroSystems is one of the city's biggest water users. Under the rate hike, it would pay $86,370 more each year for water.

Likewise, Hawker Beechcraft's bill would go up $31,363 a year, Wesley Medical Center would see a $12,008 increase, and Wichita State University's bill would climb by $978.

Wichita City Council members asked the utility to examine the rate hike, but utility director David Warren said he doesn't recommend it.

Instead, he stands by his original proposal to increase rates by 5 percent and increase the base charge -- or surcharge -- by $2. That would give the utility a reliable cash flow that's not dependent on how much people use.

The unusually rainy weather the past two years is one of the reasons the utility is struggling financially now.

"Right now, I think it's important that we not do things that would adversely affect our industrial base," he said. "This has the possibility of showing a negative economic impact on the people that provide the jobs in this community."

City Council members came to no conclusions after the presentation.

But they will likely decide on a rate increase when they adopt the 2010-11 budget in August.

The rate increases would start in January.

The utility has already delayed equipment purchases, put off improvement projects and held open 19 vacant positions.

The open positions save $824,000 this year and would save $978,000 next year.

The utility also plans to lay off 19 workers, saving about $915,190 next year. Most of those workers -- clerks, engineers and environmental scientists -- would fill open positions in water utilities or elsewhere in City Hall, Warren said.

The layoffs probably wouldn't come until October.

Mayor Carl Brewer acknowledged the hard choices the council faces.

"This is difficult here today," he said. "But we're going to work through it."

Reach Brent D. Wistrom at 316-268-6228 or bwistrom@wichitaeagle.com.

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