Water Rate Study 1950
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REPORT
ON
WA'l'ER HATES
FOR THE
CITY OF. SALINA, KAN~AS
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Lloyd W, Price - Mew or
1. F, Stephenson - Commissioner
Carl Ramsey - Commissioner
A. L. Webb - Commissioner
R. W. King - Commissioner
E. J. Allison . City Manager &
Water Superintendent
Chas. E. Banker - City Clerk
Harold Peterson - Deputy City Clerk
C. L, Clark - City Attorney
Harold F. Harpor - City Engineer
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MARCH 1950
(149-45 )
WIlSON & COMPANY
- ENGINEERS ~
Salina, Kansas
REPORT ON WATER RATES
FOR THE
CITY OF SAUNA, KANSAS
OUTLINE OF CONTENTS
Page
SECTION 1 - GENERAL INFORMATION
Purpose of Report. . . . . . . . . . . . . . . . . . .. 1
Reason for Revised Water Rates . . . . . . . . . . . .. 1
Trend in Population and Water Usage. . . . . . . .. 4
Water Lost in Distribution System and "Free" Water . .. 5
Pipe Line leakage . . . . . . . . . . . . .. 5
Low Flows Are Not Registered. . . . . . . . . . .. 5
Faulty Meter Registration . . . . . . . . . . . .. 6
Free Vfater . . . . . . . . . . . . . . . . . . .. 6
Quantity of Water to be Used in Establishing Water Rates. 7
SECTION 2 - BASIS FOR THE Wi. TER Ri. TE SCHEDUIE
Gene ral . . .. ... . . . . . . . . . . .
A.W.W.A. Recommendations on Rates. . . . . . . . .
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SECTION 3 - P.MOUNT OF REVENUE REQUIRED
General. . . . . . .. .. . . . . . .. . . . . . . . . . 10
Determining Financial Requirements . . . . . . . 10
Operation and lmintenance Expense. . . . . . . . . . . . 10
Depreciation (Replacements & Extensions) . . . . . 11
Expenditures for New Construction. . . . . . . . . . 13
Bond and Interest Payments . . . . . . . . . . . . . .. 14
Fire Hydrants. . . . . . . . . . .. . . . . . . 15
Classification of Expenditures . . . . . . . . . 16
Commercial. . . . . . . . . . . . . .. 16
Meter and Service Lines . . . . . . . . . . . 16
Production and Transmission Expenses~ . . . . . . . 16
Distribution Elpense for Conmercial or Intermediate
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Distribution Expense for Domestic Customers . . 17
Fire Hydrants arid Connections . . . . . . . . . .. 17
Tabulation of E~nditures. . . . . . . . . . .. . . . . . 17
Customers . .. . . .- .- . . . . . . . .. .
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SECTION 4 ... FIRE PROTECTION
eJe.neral. . . . . . . . . . . . . . . .- . . . . . . . .. 18
Separate Charge for Fire Protection. . . . . . . . . .. 19
Method of Determining Value of It'ire Protection . . . .. 19
l~thod of Collecting for Fire Protection . . . . . . .. 21
Fire Protection Charge in Other Cities . . . . . 22
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OUTLINE OF REPORT (CONT'D)
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SECTION 5 - RATE STRUCTURE
General. . . . . . . . . . . . .
Minimum Meter and Service Charge . . . . . . . .
Commodity Unit Rates . . . . . . . .
Vfuo1esale Unit Rate . . . . . .
Intermediate Unit Rate. . . . . . . . .
Domestic Unit Rate. . . . . . .
Rate Steps . . . . . . . .
Domestic Rate .. . . . . . .
Intermediate Rate . . . . . . . . . .
Vfuolesale Rate. . . . . . . . .
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SECTION 6 - RATE SCHEDULE COMPUTATIONS
General. . . .. . . . . . . . . . . . . . . . . .. 24
TableH 1. - Data. Required in Computations . . . . . . .. 24
Distribution of ~enditure5. . . . . . . . . . .. 24
Total Amount of Sales and Pump age . . . . . . . . . 24
Table 2. - Water Sales by Meters and Classification. .. 25
Table 3. - Computa+.i on of Meter and Service (;harge . .. 25
Table 4. - MinimUft Charge per Month.. . . . . .. 26
Table S. - Gomputation of Commodity Charge . . . . . 27
Wholesale Rate.. ..... . . . . . . 27
Intermediate Rate . . . . . . . . . . . . . . . .. 27
Domestic Rate . . . . . . . . . . . . . . . . . . . 27
Table 6. - Comparing Formula Rates with Present
Salina Rates. . . . . . . . . . . . . . . . . . . .. 28
Amount of Revenue from Established Rates. . . . .. 29
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SECTION 7 - CONCLUSIONS AND RECOMMENDhTIONS
Conclusions. . . . . . . . . . . . . . . . . . . . . 30
Recommendations. . . . . . . . . . . . . . . . . . . .. 31
SUPPIElvlENTkRY INFOIil.L'.'I'ION
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General. . . . . . . . . . . .
Factors Affecting Water Rates. . . . . . . . . . . . . .
Curves for Compal~ison of Water Rates . . .
Cities Used for Comparison ..... . . . . .
Table A. Comparison of Water Hates - First Class
Cities Larger than Salina . . . . . . . .
Table B. Comparison of Water Rates - First Class
Cities Smaller than Salina. . . . . . . .
Table C. Comparison of Water Rates - First Class
Cities with Population Over 10,,000 . .
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ANALYSIS OF RJ', TE COHPARISONS. . .
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REPORT ON WATER RATES
FOR THE
CITY OF SALINA, KANSAS
SECTION 1
GENERAL INFORMATION
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PURPOSE OF REPORT. This report has been prepared for the purpose of making
a study of water rates for the City of Salina. The tentative new rate
established in July 1949 has been analyzed in this report to determine
whether the resulting revenue viil1 be adequate and whether the charges have
been fairly distributed among the various classes of customers, Where
revisions in the existing water rates are found necessar,y, recommendations
are made regarding a revised rate schedule.
REASON FOR REVISED WATER RATES. There were four principal reasons why it
was necessary to raise the water rates in Scil. ina last year:
1. The water rates in Salina have been gradually decreased, by
successive steps in 1932, 1936, 1939, and 1944, until the rates after 1944
were approximately one-half the amount charged from th3 time the waterworks
system was purchased in 1925 until 1932. A portion of this reduction was
justified by the fact that the original waterworks bonds were being paid
off, and because the plant was being operated more efficiently. However,
these savings resulting from lower bond and interest payments and better
plant efficiency were largely offset by increases in wage rates and material
costs and the necessity of making extensions and improvements.
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As a result of the lower rates, the expenditures in 1947 and 1948 for
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maintenance, operation and new construction exceeded the revm ue collected
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by a total of $26,366, and it was necessary to draw on the reserve fund
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to make up the deficiency. This made it evident that rate reductions had
been too drastic in the past, and that SODle upward revisions were necessary.
The following is a tabulation of water rates in use in Salina since 1925:
Salina W"ater Rates in Cents per 100 Cubic Feet
1925-32 1932-36 1936-39 1939-44 1944-49 Present
Quantity Rate Rate Rate Rate Rate Rate
First 3000 Cu. Ft. 22-1/2~ 20f 17-1/2~ 15~ ll-1/4~ 16.B~
Next 6000 Cu. Ft. 18~ 15~ 15~ l2~ 9~ 13.5~
Next 6000 Cu. Ft. 12~ 10~ 10~ 9~ 6-3/4~ 10.6~
Over 15,000 eu.Ft. 10~ & 5 ~ 5~ 5~ 5t 3- 3/4~ 5.6~
2. A second reason for the ne cessi ty of increasing the water rates
was the steady rise in the cost of material, labor and equipment. The
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water works dollar, like the grocery store dollar, does not buy nearly as
much cast iron pipe, pumps, and chlorine as it did a few years ago. For
this reason, practically all the cities in the United States have found it
necessary to increase their water rates since the recent war, unless they
already had excessively high rates before the recent increase in costs.
3.. A third necessity for higher rates is too large amounts of im-
provements that must be made to the water distribution system. During the
years prior the recent war, there was a relatively small amount of large
mains installed, and during the war practically no material was available
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for new construction. However, during the 25 years between 1925 and 1950
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the population of Salina increased 50%, and the usage of water increased
400%. The storage and pumping facilities were improved during those years,
and small mains were provided for new areas, but the greatly increased
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rate of pumpage had to be forced through undersized mains. Klse, the iron,
manganese and hardness of the Salina water has been constantly coating the
interior of the mains and this further reduced their carrying capacities.
As a result, in several areas of the City, it has become impossible to de-
liver water with the pressure required to provide satisfactory domestic
service and to insure adequate fire protection. A report now being pre-
pared describes the deficiencies in the distribution system, and outlines
a construction program to provide thE;; necessary improvements.. In an
attempt to reduce the deficioncies in the water works system, extensive
improvements have been made during the past three years_, amounting to an
average of ~68, 300 worth of new co ns truction pe r year. Addi tional amounts
of improvements and enJargements will be necessary for several years in the
future, before the program is completed. This will be discussed Jater in
this report and the amount of additional revenue required for new construction
will be determinedo
4. The fourth reas on for increasing the water ratesis to provide
funds for constructing and operating the proposed water softening plant.
After tIre softening plant is in operation, the actual saving due to the use
of soft water will exceed the construction and operation cost of the plant,
but this does not preclude the necessity for higher rates in order to
transfer these savings back into the waterworks fund.
The amount of revenue required to offset the increased costs
mentioned above,.will be discussed in detail later in this report.
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TREND IN POPUIA'l'ION AND WATER USAGE. When establishing water rates, it is
necessary to anticipate the probable future demand for water. If the
amount of water used is constantly increasing, then the rates can be
rather close to the actual production costs, as the overall unit cost
is redu0ed slightly with increased output. This results from the fact
that the overhead and fixed costs remain rath8r ccnstant at all rates of
pumpage, and only t,h<:; pumping and treatmEmt costs vary almost directly
wi th output~
The pupulation of Salina has been increasing at a relatively uniform
rate for the past 50 yearss and thero is every indication that a similar
rate of increase will continue in the futureo The Curve (Plate I) on the
Eollowing page shows that tho population has increased at a rate of about
4,000 persons ever 10 years since 1900, which will make the estimated
population about 30,000 in 1960.
The rate of water usage has been increasing even faster than the
population, because the average amount of water pumped per capita per day
has increased from 63 ga:lons in 1926 to about 160 gallons in 1949. This
increased use of water per capita per day is caused principally by
airconditioning, more sanitary facilities, automatic dish washers and
garbage disposal units, and better kept lawns. The total amount of water
pumped por year increased from 411 million gallons in 1926 to 1,560 million
gallons in 1949. This information is shown graphically on Plate II.
It is assumed that a similar rate of increase in water usage will
continue in the future, and this should provide assurance that a proper
rate schedule established now should be adequate for the future, and it
mightbe possible to reduce the rate slightly within 10 yearso
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I ~---~r~--;~-- .' T~---L--~ SA~NA.--KAjirSAS:-~l
I' , 1 ,.1 ' '1 . j RATES F,W.ATER PUMPAGE
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PLATE D
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WATER LOST IN DISTRIBUTION SYSTEM AND "FREE" WATER. A very important item
which must bo given consideration when establishing water rates is the
unaccounted for and "free" water. More than 38% of all water pumped into
the City mains in recent years has been lost in the distribution system
or given to City departments without charge. Since this water is never
registered on the custaners' meters, it is obvious that the cost of
pumping, purifying and distributing the non-revenue water must be in-
cluded in a higher unit charge for metered water.
Non-revenue water is a necessary factor in the operation of a utility,
but the amount of unaccounted for water can usually be kept below 25%, and
the Salina Water Department is making an attempt at the present time to
reduce the loss as much as possible. The following are the principal
reasons for non-revenue water:
1. Pipe Line Leaka~. Water is lost from the distribution system
through leaky pipe joints, poor house service connections, cracks in cast
iron pipe, and leaking valves and hydrants~ It is difficult to find these
leaks, end it may be nec0ssary to make a pitometer survey of the distribution
system to locate those sections of the system tr3t have the largest losses.
2. Low Flm~ Are Not Registeredo Leaky plumbing fixtures will per-
mit a continual loss of water, but the flow is so slow that it .vill seep
through the meter wi thout registering. Although the loss in individual
fixtur~s is small, when taken collectively over the entire city for a year
it amounts to millions of gallons. An educational campaign to encourage
home owners to stop plumbing leaks is sometimes beneficial, and spot check-
ing homes for leaks will help to determine the amount of loss from this
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3. Faulty Meter Registration. When a water meter is new it is a very
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accurate instrument,. but as it becomes older it begins to run slow. This
is especially true in Sal ina where the water is hard and contains iron and
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manganese, as these minerals form a coating on the interior of the meter
which retards its movement and rewlts in a low reading. The Water Depart-
ment has begun a program of reconditioning all water meters and restoring
them to near their original accuracy. Ylben this reconditioning work has
been completed, the amount of unaccounted for water will undoubtedJy
be greatly reduced.
4. Free Water. Large quantities of water are given to other City
Departments each year, free of charge. During 1949 the amount of free water
has been estimated at 4-1/2% of all water pumped, and was distribuwd about
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as follows:
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Flushing Sewers and Flush Tanks ............. 1,476,000 gallons
Washing Streets and Fighting Fires........... 4,550,000 gallons
Hydrant Flushing.............................. 6,390,000 gallons
Water used in City Parks.....................50,lOO,000 gallons
TOTAL FREE WA TER PER YEAR
68,516,000 gallons
Most water works authorities contend that the Water Works Depart-
ment should be opereted on a strictly business basis, and all water used
by both private customers and the municipality should be paid for. However,.
in that case, the General Fund of the City should be refunded by the Water
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Department for office rent, administrative and attorney costs, and possibly
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some city taxes, and this would partially offset the charge for water.
Also, it must be realized that the domestic customf:rs, who use over 7CY/o of
the water in Salina, are the same general group who get the most benefits
from the parks and sewers. Therefore, no real injustice is done, and book-
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keeping is simplified, if the cost of the free water given to the City is
added to the customers' water bills. If a fen -thousand dollars additional
revenue per year is needed in the Water Department at some future date, a
charge could then be made against the other City departments for free water.
QUANTITY OF WATER TO BE USED IN ESTABLISHING WATER RATES. When computing
the rate base, later in this report, it will be assumed that the free water
will amount to 5%, and the amount of unaccounted for water can be reduced
to 25%, making the revenue producing water amount to 7CJ!, of the total pumpage.
Since the curve on Plate II indicates that the total pumpage in 1952 would
be about 1,700 million gallons, with th:i present 38% loss, we will assume
too t the pumpage will be only 1560 million gallons after the loss has been
reduced to 30$. The estimated amount of water which will be sold in 1952
will be 70% of 1560 million gallons, or about 1,093 million gallons (145.7
million cubic feet). These figures will be used in later computations.
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SECTION 2
BASIS FOR THE WATER RATE SCHEDUIE
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GENERAL. Thero are two principal factors to be detennined when establishing a
rate base: first,. the total amount of revenue required must be computed,
and second, a method of distributing these costs equitably over all users
and property owners in the city must be devised.
The amount of revenue a waterworks should receive is the sum of the
costs of maintenance and operation, plus the estimated cost of improvements
and extensions,. plus any depreciation allowance which may be included.
Having determined the gross total of income needed, the next IT oblem
is to allocate this amount fairly to property assessments and to water rates.
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This division is necessary because a waterworks performs two principal fund-
tions: (1) it provides fire protection, which is chargeable to the taxpayers
as a whole, and (2) it supplies a commodity which should be paid for by the
customers who use the water. The nonusers should pay for the portion of the
waterworks costs which are incurred in providing fire protection, and the
remainder of the incoIm required should be assigned to the waoor customers
on a basis that is fair to both the large and small users.
A.W.W.A.. RECOMMENDJiTIONS ON RATES. For many years the :s ading engineers of
this country have given a great deal of study to water rates and have ex-
pressed numerous theories on the subject. The American Water Works Asso-
ciation has attempted to analyze and evaluate the various theories advanced
and to develop a workable pattern or fonnula by which all waterworks per-
sonnel could be guided in the preparation of water rate schedules.
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The first really constructive work on this subject was done by A.W~W.A.
in 1923, and the recommendations made by them at that time have since then
been used extensively, but there were many pertinent questions in rate
making which were not settled at that time. Twenty-five years later, in
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1948, the Michigan Section of A.W.W.A. again undertook the study of water
rates in an attempt to clear up the questions not settled in 1923, and to
analyze the results of the previous recommendations. Since these two
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studies and reports are by far the most thorough and logical of any
theories advanced, we propose to use the 1l..W.VfJ.. recommendations, with
minor adjustments, as the basis on which to determine the Salina water rates.
The following is a brief outline of the A.W.W.1l.. recommendations. Each
subject listed below will be discussed in detail in subsequent sections of
this report and the value of each item will be determined.
I. Amount of Revenue Required - Must be Sufficient to Pay.
1. Operating Costs
.2. Maintenance, Renewals & Replacements (Depreciation)
3. Anticipated New Construction Work (Extensions and ImProvements)
4. Bond and Interest Payments
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II. Allocation of Costs:
1. Fire Protection Costs, chargeable to Taxpayers
2. All other costs to be included in a Rate Schedule, consisting of:
A. Minimum Charge - to Include Cost of:
a. Meters and Service Lines
b. Reading Meters, Billing and Collecting
c. General Office Expense
d. Sufficient Water for Domestic Sanitary Needs
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B. Other Cos ts to Be Applis d in Three Steps
a. Lowest step - Viliolesale
b. Next Step - Intermediate - Cost of Production &. Trans-
mission plus Distribution Lines 6" and Over
c. Highest Step- Domestic. Cost of Production, Transmission
Distribution Lin8s Under 6" and Lost Wator
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SECTION 3
AMOUNT OF REVENUE REQUIRED
GENERAL. The rate structure for a municipally owned water works should
provide sufficient revenue to pay all operation and maintenance expense,
pay all debt requirements, and create a sufficient reserve to meet all
probable replacements, extensions and improvements. The proposed Salina
rate should include not only the expenses of the existing water works
facilities but also the cost of constructing the proposed major projects,
of enlarging the distribution mains and providing a water softening plant.
DETERMINING FINANCIAL REQUIREMENTS. The following is an explanation of
the expenditures mentioned above, and a determination of the amount of funds
roquired to pay for the cost of c~ch of the finu typos of expenses at Salina.
1. Operation and Maintenance Expense. Sufficient revenue must be
provided to cover the cost of economical and efficient operation and main-
tenance .
The amount of funds required to operate and maintain the existing
water works facilities can best be determined by studying the Water Depart-
ment expenditures during recent years.
The cost of operating and maintaining the proposed water softening
plant is determined by canputing the cost of chemicals, electric power,
personnel and repairs necessary to operate the plant, when treating the
total amount of water to be pumped in 1952, which was estimated in
Section 1 of this report as 1,560 million gallons per year. The cost of
chemicals will vary almost directly with the rate of pumpage, but power,
personnel and repair expenditures are more or less fixed costs regardless
of the rate of plant operation. Therefore, the future costs of operation
will not increase as fast as the revenue, which should provide some addi~
tional rese~ as the useage of water increases during future years.
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The following is the estimated annual expenditure for operating and
maintaining both the existing waterworks facilities and the proposed water
softening plant in 1952 when the estimated pumpage for the year will be
1,560 million gallons.
Cost of Operating and Maintaining the Existing Waterworks.
Annual Expenditures (from City's Records) during 1948 III $66,915
Annual Expenditures (from City's Records) during 1949 .. $71,577
Annual Estimated Expenditure during 1952
= $80,800
Cost of Operating & Maintaining the Proposed Water Softening Plant
Chemicals @ 5.3~ per 1,000 gal. ... $82,100 per year
Electric Power @ 0.3; per 1,000 gal. III 4,700 per year
Additional Personnel @ 1.0_ per 1,000 gal. III 15,600 per year
Maintenance @ 0.4, per 1,000 gal.. 6,200 per year
Total Operation and Maintenance Cost. . . . $109,200 per year
Total Cost of Operating and Maintaining Both the
Existing Waterworks and the Softening Plant in 1952 = $190,000
2. Depreciation (Replacements and Extensions). Private utilities
always carry an item of depreciation for the purpose of building up a re-
serve fund with which to pay for new construction as required. Municipal
utilities have found it more satisfactory to plan for future construction
and include a specified amount in the rate base to pay for most of the
anticipated new construction.
The new construction progrem, which includes the installation of
numerous large mains and additional elevated storage, as outlined in a
recent report on water pressures, should be set out as a specific expendi-
ture in the rate base and not be covered by an indefinite percentage under
depreciation. The same is true of tre funds required to build the pro-
posed water softening plant. The-se will .be d-iscussed further in later
paragraphs of this section of the report.
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There will be minor replacements and extensions in the existing water
works system which it is difficult to anticipate, and for this reason it
is advisable to carry a small depreciation item to cover the more routine
work, done mostly by force account, and which will supplement too main
construction program which will be planned in advance. Furthermore, the
wording of the certain sections of tre Kansas Statutes requires an item
for "depreciation" in connection with certain bond issues, and for this
reason the allowance for "replacements and extensions" will not be as
acceptable to bond attorneys as the term Itdepreciation1t.
However, the depreciation item should not be an amount which will create
a sinking fund, capable of replacing the entire system and plant in a few
years, as it is unfair to mB.k:e a "double chargell against the prosent water
users by requiring them to pay for too construction of the proposed water
softening plant, and at the sam time create a reserve fund to replace it.
At some future time, after the bonds for the construction of the plant have
been redeemed, a depreciation item could be included in the rate base to
build up a sinking fund to be used to enlarge or replace the plant when
necessary. But both a bond and interest charge and a depreciation charge
should not be carried on a plant at the same time.
The amount of depreciation to be placed on the existing facilities,
which have been paid for, depends upon the condition of the system and the
amount of minor extensions contemplated. In the past, it has been the
practice at Sal ina to use about 0.8% of the estimated value of the system
as the annual depreciation item, and that seems to be satisfactory and will
be continued in establishing the present water rates. The valuation carried
in the City's records on the waterworks system at the present time is about
$1,300,000" and we have made no attempt to revise this figure, although the
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present da,y val. ue, after allowing for ample depreciation, would be approx-
imately $2,000,000. Therefore, using the City's valuation, this item will
be 0.8% of 11,300,000 · $10,400 per year.
3. Expenditures for New Construction. There are two major construction
programs contemplated for the Salina Water Works at this time which should
be given consideration when establishing the new water rates. One is the
installation of large mains and additional elevated storage, and the other
is the water softening plant. The mains and storage can be paid for with
cash and will be discussed in this paragraph, but a portion of the water
softening plant should be financed with a bond issue and will be included
under the heading of Bond and Interest, on the following page.
The report now being prepared on water pressures explains the necessity
for larger transmission and distribution mains in portions of the City which
have insufficient water pressure at the present time to provide satisfactory
domestic service and insure adequate fire protection. Additional elevated
storage is also included in this program; and an itemized estimate of cost
was presented in the report covering all recommended improvements.
These new mains can be installed in sections over a period of years,
and only sufficient funds must be raised each year to pay for the improve-
ments to be made at that time. Therefore, this work can be paid for in
cash by making sufficient allowance in the water rates to create a reserve
fund for this purpose.
'!he construction schedule recommended in the water pressure report
calls for an expenditure of about $30,000 for large mains during the first
year, with a gradually increasing expenditure each year as the increased
sale of water produces a 11 rger reserve fund in the future. 'l'herefore J the
new rate base will include an item of $30,000 for new construction not
financed with a bond issue.
-
.
-13-
...
4. Bond and Interest Payments. .At the present time, the Vlater Works
Department has no bonded indebtedness, and there was a surplus of about
$300,000 on hand at the end of 1949. The new water rates established in
July 1949 should collect an average of about $220,000 per year during the
-
next two years. The average operation and maintenance cost, together with
the allowance for depreciation will reqaire an expenditure of about ~90,000
per year during that time, and if we allow an additional $30,000 per year for
new construction on the distribution system, it will leave a surplus of about
$100,000 per year. At this rate, there will be a total surplus in the water
works fund of about $500,000 by the end of 1951.
A reserve of about $100,000 should always be maintained in the Water
Department, to care for emergencies and unanticipated expenditures, and to
,..
smooth out the balance between income and expenditures during unusual years.
Therefore, this Ylill leave about $409,000 avaiJable for the construction of
a water softening plant.
The present estimated construction cost of the softening plant is
$760,000. After deducting the $400,000 already available, this will leave
about ~360,OOO which must be provided for the construction of the plant.
This $360,000 could be secured by several methods. One method would be to
delay the letting of construction contracts for 3 or 4 years. But it would
be unfair to the present water users to expect them to continue paying the
higher water rates for several more years without J:e rmitting them to enjoy
the convenience and savings which will result from the use of soft water.
Therefore, the construction of the plant should not be delayed until the full
amount of its cost is on hand.
The additional money required could be financed with temporary notes, but
if they were issued, they should be of relatively short tem, and that would
make the annual payment by the present water user rather high, and the interest
on temporary notes is more than on bonds.
-14-
"'"
Therefore, it seems that the most desirabls tOOthod of providing the
$360,,000 would be with a bond issue. These could be Revenue Bonds, payable
from the sale of water, with no affect on property taxes. It is a matter of
judgment as to how fast such bonds should be retired, but it should be kept
in mind that the softening plant would be here for many years, and it is
only fair that future users should pay their share of the construction cost.
Therefore, it, might be advisable to issue the bonds to be retired O"ter a
period of 18 years at the rate of $20,000 per yetrr. The interest on these
bonds at 2% will amount to $7,200 the first year, decreasing to $400 the
18th year" and averaging about $3,800 per year throughout the period.
Proceeding on that basis, an il.€m of $,527,200 per year should be included
in the new water rates to care for the "Bond and Interest Payments".
FIRE HYDRANTS. There are two principal items of cost in connection with
fire hydrants. One is the maintenance and repair of existing installations,
the expenditures for which have averaged about $800 per year during recent
ye ars .
The other item is the cost of furnishing and installing new hydrants.
Each fire hydrant, including tho 611 pipe stub and 6" gate valve and box,
will cost about $400 installed. Over a period of years, the Water Depart-
ment has installed an average of 10 new units per year.
Therefore, the water rates should include about $!i,800 per year for
ItHydrant Expense". The expenditures rentioned above are' in addition to
the value of IIFire Protection", which includes the water used for fire
fighting, and the investment in pumping equipment, large mains and storage
provided for fire recpirements, and which will be discussed in detail in
the next section of this report.
..
..
-15-
CIASSIFICATION OF EXPENDITURES. The preceding discussion in this section
of the report covers the various expenditures which will be made by the
...
Waterworks Department each year. In order that those costs can be allocated
properly to the various classes of customers, the A.VI.W.A. Formula requires
that each of the expenditures mentioned must be broken down into six
principal divisions as follows:
1. Commercial, which includes the cost of reading meters, billing,
collecting, administration, office expense, and general overhead costs not
specifically chargeable to any othar classification.
2. Meters and Service Lines, includes the cost of new meters, and all
.
expense of installing, repairing and maintaining the existing ones; alSO,
any costs relative to the house service lines. However, this item is small
..
in Salina, as the service lines are usually owned and maintained by the
customers.
3. Production and Transmission Expense, or the cost of supplying water
to the distribution system, including all the costs up to the point where
the water is delivered under pressure at a reasonably central point. Under
this classification will. come all costs pertaining to wells, low service
supply lines, pumping station, proposed water softening plant, storage, and
tranSmission facilities. The transmission mains are the large lines from
the pumping station to the central point of distribution, and are sub-
stantially without service taps, which consists of about 8,000 linear feet
of 12" pipeline in the case of Salina.
4. Distribution Expense for Commercial or Intermediate Customers.
This includes all costs for new pipeline construction and the expense of
repairing, maintaining and extending the existing lines which are 611 or
larger in diameter, excepting about 30% of the 6" pipe which is allocated
to Domestic Customers.
-16-
..
5. Distribution Expense for Domestic Customers. This includes all
costs and expenses relative to the pipe lines which are less than 6" in
diameter, and about 30% of the 6" pipe.
6. Fire Hydrants and Connections. This expense covers the cost of
installing new hydrants, as well as maintaining the existing ones. These
-
expenditures are not incorporated into the water rate base, as they are
paid separately as "Hydrant RentalJl, as explained later under "Fire
Protection".
Tll.BULATION OF EXPENDITURES. The following is a summarized tabulation of
the expenditures previously detennined, broken down into the classifications
required for theA'.li{~Vi;.J.~ate Fonnula.
CLASSIFICA nON OF EXPENDITURES
(For the Year 1952)
-
Distribution
'Commercial'Meters &'Production &' System
1& General 'ServicesITransmission' Intermed.Domestic
Opera tion &, I ,
Maintenance I
of Waterworks $27,600 '$16,800 I $41,040 $ 900 1$ 200
I, ,
Operation & I
Maintenance'
of Softening
Plant I
, Hydrant I
"Rental' Total
,
'$2,460 '$ 89,000 [I ~
1
101,000
Depreciation
(Replacernen t
&. 'Repairs) ,
I
400' 1,200'
2,520
3,000
800
2,000
1 3,480
New Construction
I 12,000 '6,000
I
, 9,000
-
Bond &. Interest
(Softening Plant)
I
Fire Hydrants
(Depreciation
& New) I
1 4,800
19,040
I 8,160
TOTALS
$28,000 '$18,000 ' $166,600
1$14,900 $7,000
$27,900 I $262,400
-17-
1 r:~
101,000 . ,j ,
10,400
30,000
27,200 '1.
4s800
-
SECTIrn 4
FIRE PROTECTION
GENERAL. In too preceding sections of this report, the amount of revenue
required to operate the waterworks was determined. The second question is
how this amount is to be allocated to the property assessments and to the
utility rates; or, in other wOrds, what proportion should be paid for by
nonusers and what portion by users of the water.
It is generally accepted that a waterworks has two principal functions:
it performs a service, and it supplies a commodity. The service comprises
all those benefits enjoyed by the taxpayers as a whole and includes the
increased velue of property in the city due to the watezworks system, the
intangible values of good health of the community due to a pure water supply,
and especially the value of fire protection. These benefits are generally
realized by a city when a new waterworks system is first constructed, and
practically the entire cost of the original system is paid for by taxes
assessed against private property as a whole. But, as time passes, City
Officials sometimes lose sight of the general benefits and gradually shift
the entire burden of the waterworks system over to the water customers.
Although no rate schedule will be perfect in all details, it is evident
that the practice of raising all revenue through the sale of water alone
often results in injustice. A lumber bUSiness, which uses a negligible
amount of water and accordingly receives a minimum bill, pays practical~
nothing for fire protection although its demand is large. Also, nonresident
property owners receive the benefits of fire protection, although they pay
nothing toward the ope ra tion of the waterworks system, if all revenue to the
water department comes through sale of water. The insurance rates on all
-18-
-
the property in the city is much lower because of the waterworks system, yet
the saving in fire insurance rates is not fairlY apportioned over all property
if all the revenue is derived from the sale of water. The industries which
use a large amount of wa tor and the citizens who maintain large lawns are
paying for fire protection on tho high valuation property which use but
little water.
SEPARATE CHARGE FOR FIRE PROTECTION. Most cities make a charge for this
fire protection separate from the :revenue secured from the sale of water.
At Salina" a reasonable charge was made against property owners for fire
protection at the time the Salina waterworks was purchased in 1925. However,
during the intervening 25 years, this assessment has been graduallY lowered
until now onlY a token charge of t,l.OO per year per hydrant is collected
from the taxpayers.
It is generally realized that a considerable portion of tre cost of a
waterworks is created by the necessity of providing additional capacity to
meet the :requirements of fire protection. Therefore, in order to determine
how much of the waterworks expense should be allocated to fire protection,
we must carefully evaluate the cost of the various factors involved in
prOducing, treating, storing and distributing water and divide the cost of
each of these i terns in proportion to their use in supplying fire demand
and ordinary demand.
METHOD OF DETERMING VALUE OF FIRE PROTECTION. The A.VI.W.A.. has suggested
that tho capital cost chargeable to fire protection may be determined most
equitably by' using the ratio of the maximum fire demand, based on fire
unde!'i1JTiters' requirements, to the combined demand for fire plus all other
uses. Tho maximum fire deme..nd in Salina, as set forth by the requirements
-19-
of the State Inspection Bureau, is 5,000 gallons per minute, for a period
of 10 hours, in the principal Mercantile District. This amounts to
-
3,000,000 gallons in 10 hours, but storage will permit this pumpage to be
distributed over a period of 15 hours. ThE) maximum demand for all other
purposes last year was 9,355,000 gallons in 24 hours, and about 75% of this,
or 7,000,000 gallons, was required in tho 15 hour period of maximum demand.
Therefore, the ratio of fire requirement to tho total demand, including
fire is 3 to 10 or 30%.
This 30% should be applied to all "fixed chargesll excepting those
relating to meters and fire hydrants. No part of thE: expense of meters,
service lines and distribution mains smaller than 6 inches should be charged
to fire protection, but 100% of the hydrant expense should be included.
The following is a reasonable estimate of the amounts that should be in-
eluded in fire protection costs, based on probable expenditures in 1952:
Items in the 30% Classifications
Portion of the Administration and General Expense
3<:1J6 of $8,200. . . . . . . . . . . . . . . .
. . .
$2,460.00
Depreciation on Applicable Items
0.8 of $950;000 ~))% ~...
..........
2,280.00
Annual Construction of Large Mains
30% of $30,000 c . e . . . . .
..........
9,000.00
Bond and Interest Payments
3~ of $27,200 . . . . . . . . . . . . . . . . .. 8,160.00
Items in the 100% Classification:
Installation of New Hydrants
10 per year at $400.00 e
. .
...........
4,000.00
Depreciation on Existing Hydrants
2% of $60,000 ..... . .
. . . ,
. . .
. . . .
1,200.00
800.00
rfuintenance & Repair on Existing Hydrants .
. . .
. . .
Total Amount Chargeable to Fire Protection Annually. .
. .
.$27,900.00
-20-
...
METHOD OF CQUECTING FOR FIRE PRarECTION. Several different theories have
been advanced as to the best method of collecting for fire protection, but
most cities have found that a charge for "Hydrant Rental" is the simplest
method; this will automatically take care of the cost of serving new areas
as they are developed, as additional hydrants are always needed as a city
expands. Trere is a total of 601 hydrants installed in Salina at the present
time" and therefore the total expense of $27,900 would make the rental
charge amount to $4,~00 per hydrant per year.
FIRE PROTECTION Cf!ARGE IN OTHER CITIES. A study has been made to detennine
what charge other cities in this country are making for fire protection.
It was found that 71% of all cities over 10,000 population who charge for
fire protection use the llHydrant Rental" method of making the assessment,
and the amount charged varies from $,.00 to $100.00 per hydrant per year,
with most of the cities charging between $30,,00 and $,0.00 per year.
Therefore, the charee of ~4,.00 per hydrant per ;year, proposed for the
City of Salina, seems to be entirely in line with the gener~l practice.
-21-
SECTION 5
RATE STRUCTURE
GENERAL. The total amount of revenoo recp ired by the Water Works Depart-
ment each year has been detennined as $262,400. After $27,900 is collected
from taxes as "Hydrant Rental", the remaining $234,500.must be secured from
the sale of water.
The A.Vi.W.A. has recommended a rather definite rate schedule for allocating
the required charges to the different classes of users. The schedule con-
sists of a minimum meter and service charge, plus a colTillodi ty charge applied
in 3 steps, as follows:
MINIMUM METER AND SERVICE C HA OOE, is to include:
"1. All conunercial expanse and a sui table portion of administration
and overhead costs, the total ~ which is to be divided equally to all
accounts.
"2. All eXp:lnse arising out of meters and services, with a share of
administrative expense and overhoad, the total of which may be distributed
between accounts on the basis of the meter cost.
"3. There should also be added for all minimum users, the cost, based
on the domestic commodity rate, of the minimum desirable use frem the stand-
point of sanitary conditions or about 100 g.p.d. per meter."
COMMODITY UNIT RATES are to be determined as follows:
"1. The Wholesale Unit Rate is obtained by dividing the total of all
production and transmission expense (capital costs and operation and main-
tenance), plus a portion of administrative expense and overhead, by the
total annual pumpage.
-22-
-
"2. The Intermediate unit Rat:. is obtained by adding the intermediate
increment to the whoJe sale rate. The intermediate inere!ll:)nt is obtained by
dividing the total expense arising out of distribution mains serving
intermadiate customers, by the water sold through all .IlI,;lters, except sales
at the wholesale rate.
113. The Domestic Unit Rate is obtained by adding the domestic increrent
to the intermediate rate. The domestic increment is obtained by dividing the
total expense arising out of distribution mains serv;1.ng domestic customers,
plus the cost of all lost water, by the water sold t~"ough all meters 3/4 in'.
and smaller. fI
RATE STEPS are to be determined as follows:
Step quantity limitations must be adopted which, when cp plied to the
unit rates, will produce the necessa~ revenue; and the quantity limitations
and unit rates must be chocked as a whole against the system's customers~
The A.W.W.A. SUgg0StS that as an initial determination o! step quantities,
the following amounts of consumption be applied to tho three rate classes I
The Domestic Rate should apply up to a quantity equal to twice the
average consumption through all domestic S/811 and 3/411 meters j which, in
the case of Salina will be 2 x 1,000 = 2,000 cu. !t./month. However, to
provide the mcessary revenue at Salina, this step must be about 50% broader;
so we recommend that tho present first step of 3,000 cu. ft. now in use at
Salina, be continued.
The Intermediate Rate should apply up to a quantity equal to twice the
average consumption through 1" to 4" meters, which in the case of Salina will
be about 2 x 10,000 - 20,000 ~.ft./month.
The Wholesale Rate will apply to all usage in excess of the intermediate
rate or 20,000 cU.ft./mo.
-
-
-23-
-
SECTION 6
RATE SCHEDUlE OOMPUTl.TIONS
GENERAL. Using the expenditures that were determined in Section 3 of this
report and distributing them according to the schedule outlined in the
preceding section, we wi II calculate the water rates required at Salina in
1952, as follows:
TaBIE 1
DATA REQUIRED IN COMPUTATIONS
DISTRIBUTION OF EXPENDITURES. (From Page 17)
..
Commercial and General. . . . . . . . .. . .. . . . .. . . .$ 28,000
Meters and Service Lines. . . . _ _ .. . . . .. . . . . . . 18,000
Production and Transmiasion . . . . . . . . . . . . . . . 166,600
Distribution to Intennediate Customers . . . .. .. . . .. 14,900
Distribution to Domestic Customers ............. 7,000
Hydrant Rental ._ ... . . . . . . . . . . . . . . . . .. 27,900
Total Annual Expenditure $262,400
TOTAL AMOUNT OF SAIES hND PUMPAGE (In 1952)
Renvenue to be Secured from Sale of Water - $262,400 - 27,900 - 234,500
..
Total Annual of Water Sales · 1,093 Million Gal.-l,457,OOO Hundred Cu.Ft.
Total Water Free to City ... 77 n "- 103,000 If ""
Water Lost In Dist. System... 390 II ,,_ 520,000 II II II
Total Annual Pumpage ....1,560 !ullion Gal.-2,080,ooo Hundred Cu.Ft.
..
-24-
TABIE 2
WATER SAIES BY METERS AND CLASSIFICATION
(In 1952)
-
Size of No. of Average Total Annual Total Annual Sales
Meter Meters Annual Sale Sales by Classification
Per Meter (100 Cu.Ft.) (100 Cu.Ft.)
(100 Cu. Ft)
5/811 1,,565 123 920,500) Domestic Sales
3/4" 230 433 99,500) 1,020,000 (Hundred Cu.Ft.)
1" 150 453 68,000~ Internediate Sales
1 1/2" 58 1,500 87,000 385,00 (Hundred Cu.Ft.)
2lt 85 2,700 230,000)
3" 6 3,000 18,000) Wholesale Sales
4" 4 3, 500 14,(00) 52,000 (Hundred Cu.Ft.)
611 2 10,000 20,000)
.. 8,100 1,457,000
TABIE 3
COMPtITATION OF :METER AND SERVICE CHARGE
Commercial Costs
Number of Accounts
Meter and Service Costs
Number of Meter Units
$28,000
a tl,loo. $3.45 per year,
_ $18,000 = ~ r:'
- 9,230 ~1.9~ per year,
per account
per unit
Meter SizelNo. of'Meter Cost'No. of ' Annual Chg'Annua1 Chg~ Total
(Inches) tMeters' Ratio 'Units 'Per Size 'Per Meter' Service Charge
It" I 'Per Year' Per Month
, , ,
5/811 '7,565 1 '7,565 '$ 1.95 ' $ 3.45 '$ 5.40 ' $ 0.45
3/4" t 230 ' 1.5 , 345 , 2.92 3.45 , 6.37 ' 0.55
.. 1" 1$0 , 2.25 I 338 ' 4.39 3.45 7.84 ' 0.65
1 1/2" $8 ' 4 232 I 7.80 3.45 I 11.2$ , 0.9$
2" 85 ' 6 , 510 ' 11.70 3.45 , 15.15 ' 1.25
.. 3" 6 ' 10 60 ' 19.50 3.45 I 22.95 I 1.90
4" 1 4 ' 20 80 ' 39.00 3.45 , 42.45 ' 3.50
6" , 2 ' 50 100 ' 97.50 3.45 ' 100.95 1 8.40
1
-2$-
-
TABLE 4
MINIMUM CHt.RGE PER MONTH
(Service Charge from Table 3 plus Minimum Amount of Water)
Meter Size Water Included Service Charge
(Inches) Amount I Cost (From Table 3) Total
Cu.Ft. $
5/811 400 $ 0.60 $ 0(\45 $ IG05
3/411 600 0.95 0055 1050
1" 1,s200 1.85 0,,65 2,.50
1 1/211 2:400 3.65 0.95 4060
- 211 4,000 5.55 1.25 6080
311 8,000 8.40 1.90 10,>30
4" 14,000 14 .10 3.50 17.60
6" 30,000 29.10 8.40 37.50
....
..
-26-
-
TABLE 5
COMPUTATION OF OOMMODITY CHARGE
A.W.Vv.A. FORMUIA
SALINA DATA
"-
Third Step (Wl'1olesal~ Rate)
,
Production + Transmission
Pumpage (3rd Step Ra. te )
, Armual Pumpage - 2,080,000 Hundred Cu.Ft.
less lIFreell
, Water to City ~ 103,000 Hundred Cu.Ft.
Wholesale) $ 166,60Q.=$0.084/100 Cu.Ft.'
Rate ) .01,917,000 , 3rd Step Base _ 1,977,000 Hundred Cu.Ft.
,
~cond Step (Intermediate Rate)
I
..
Distr. Cost (Intermed. Customers)
2nd Step Increment Base
I Water Sales _ 1,457,000 Hundred Cu.Ft.
Deduct Wholesale
Sales - 52,000 Hundred Cu.Ft.
$ 14,900
1,406,000
Add 3rd Step Rate
Intermediate Rate
-$0.011/100 Cu.Ft. I
I
I
=. 0.084/100 Cu.Ft.,
,
-$0.095/100 Cu.Ft.,
2nd Step
Increment Base - 1,406,00 Hundred Cu.Ft.
First Step (Domestic Rate)
I
Distr. Cost (DomestiC)+Lost Water Cost '
Domestic Sales {Hundred Cu.Ft.) t
Total Water Loss = 623,000 Hundred Cu.Ft.
@ Wholesale Rate . $ 0.084
$ 59 330
1,020,000
_$0.058/100 Cu.Ft.' Cost of Lost Water $52,330
- 0.095 2ndStep Rate Domestic Distri-
I bution Cost
=
7,000
Domestic Rate
,
= 0.0153/100 Cu.Ft,
&59,330
..
-27..
TABLE 6
COMPARING FORMUU RATES WIT.I PRESENT SALINi.. RATES
Water Used
Formula Rate
Present Salina Rate
First 3,000 Cu.Ft.
Next '6~000 Cu.Ft.
Next ,9,000 Cu. Ft.
Over lS,OOO Cu.Ft.
Over 20,000 Cu.Ft.
lS.3~ per 100 Cu.Ft.
9.5~ >> " II "
9.5~ If II >> "
---
8.4~ II " 11 II
l6.8t per 100 Cu. Ft.
l3.5~ II II " 11
10.6~ II " II "
S.6~>> II " II
MINIMtfA! CHARGE
Meter Size Formula Rate Present Salina Rate
(Inches Min. Charge Cu.Ft. Allowed Uin. Charge Cu.Ft. Allowed
S/8" $ 1.05 400 $ 1.15 685
3/4" 1.50 800 1.65 982
I" 2.50 1,600 2.75 1,637
. 1 1/211 4.60 2,400 5.00 2 ,976
211 6.80 4,000 6.75 4,267
3" 10.30 8,POO 10.85 7,304
4" 17.60 14,000 18 .10 13,680
6" 37.50 30,000 36.15 44,730
From the preceding tabulation it will be noted that there is not a
great deal of difference between the i...W.W.J.. Formula Rate (based on infor-
mation developed in this report) and the present water rates in Salina.
The Formula produces slightly lower rates to the domestic and intermediate
users, and slightly higher to wholesale customers.
The minimum charge under the Fonnula is lower than the present
Salina rate, butthe amount of water included in the minimum is also less
-
under the Formula, which makes the present Salina rate actually lower to
-
the customer using a minimum of water.
-28-
..
AMOUNT OF REVENUE FROM ESTABLISHED RA'lES. An investigation has been made
to determine whether either the A.W.W.A. Formula water rates or the present
Salina rates will yield the amount of revenue required.
The amount of water registered by the different sizes of meters has been
tabUlated from the meter reading records of 1949 in the Ci ty Water Department.
From these records the number of minimum users and also the amount of water
sold in each of the rate steps, through each size of meter, were determined.
The 1949 quantities were increased 8% to arrive at the probable water sales
in 1952. The quantities thus determined were multiplied by the present
Salina rates and also by the A.W.W.A Formula rates to detennine the probable
amount of income to be derived from each set of rates.
It was found that the following amounts of revenue could be expected
from Water customers in 1952:
Income from water sales at A.W.W.A. Formula Rates . $23~.t800
Income fr.om water sales at Present Salina Rates .. 229,200
By adding, the $27,900 Annual Hydrant Rental the total income will be:
Total Annual Revenue @ A.W.W.A. Formula Rates . $263,700
Total Annual Revenue @ Present Salina Rates .. 257,100
Amount of Revenue Required (See Page 17) - 262,400
.
...
-29-
...
SECTION 7
CONCWSIONS AND REC(]iIMENDA TIONS
CONCLUSIONS. From the foregoing study and tabulations, it is evident that
the present Salina water rates are well balanced, with the exception of the
whoJesale rate which applies to quantities over 15,000 cu. ft. per month.
The actual cost of pumping from the wells, softening the water and
repumping to the distribution system, including maintenance and depreciation
will amount to 8.4; per 100 cu. ft.; therefore, the present wholesale rate
of 5.6i per 100 cu. ft. will be too low after the softening plant is in
operation. About 2 million cubic feet of water is sold in the wholesale
step each year, which, at the rate increase of 2.8; (8.4; - 5.6;) per
hundred cubic feet will add about :l;l5,600 to the amount of revenue collected
each year.
The cost of providing water for fire protection amounts to $27,900
per year; and this eJlPense can be covered by charging "hydrant rental" at
the rate of $45.00 per hydrant per year. This charge for fire protection
should be collected by taxes assessed directly against the property pro-
tected, and not charged to the water customers.
If $27,900 hydrant rental and $5,600 additional income from wholesale
water sales is added to the $229,200 revenue expected from other water sales
at present water rates, it will make the to tal annual income amount to
$262,700. This is almost exactly the amount of expenditures estimated on
Page 17 for all costs of operating and maintaining the waterworks system
including the water softening plant.
'"
...
-30-
RECamENDATIONS
The following water rates are recommended for the City of Salina,
1. Minimum Rate. The present monthly minimum rates to remain unchanged.
Size of Minimum Cu.Ft. Size of Minimum Cu.Ft.
Meter Char~ Allowed Meter Charge Allowed
5/8" $1.1$ 685 2" $6.75 4,267
3/4" 1.65 982 3" 10.85 7,304
1" 2.75 1,637 4" 18 .10 13,680
1 1/2" 5.00 2,976 5" 36.15 44,730
2. The Present Domestic. IntermediatA9 and Industrial Rates and step
quantities to remain unchanged:
(Domestic) First 3,000 cu.ft. per month 0 16.8_ per 100 cu. tt.
(Intermed.) Nextg,OOO"" " " @ 13.5_" " It "
(Industrial) Next 6,000"" II " @ lO.~~ " " II "
,.
3. 1)1e PtlElsent 'Wholesale Rate for quanti ties over 15,000 cu.tt. per
month should be increased from the pres.ent 5.6~ per 100 cu.ft. to 8.4~ per
100 cUaft., as soon as the softening plant goes into operation.
4. ~drant Rental, at the rate of $45.00 per hydrant per year should
be charged to pay tor fire protection. This assessment should be made in
sufficient time to be entered on next year's tax rolls.
After making the changes recommended in paragraphs 3 and 4, above, the
revenue resulting trom the present Salina Water rates will be suf'ficient to:
a. Operate and maintain the existing waterworks system.
b. Construct and operate the proposed water softening plant.
c. Build $30,000 worth of new distribution mains annually.
d. Provide 77 million gallons of "free" water to the City Parks
and other City uses each year.
~
.".
Respectful11 submitted,
WIISON & COUPANY, EmlNEERS
27 March'1950
By
,~~~yI:-~~~
.. Har1H. C~
-31-
SUPPIEMENTARY INFORMA nON
COMPARISCN OF WATER RATES:.lli CITIES.IF KANSAS
'"
GENERAL. The follOW'ing canparison of water rates in the different cities
of Kansas is offered for general infonnation only" and is not for the
purpose of justifying the Salina rates or condemning the rates in other
cities" as we realize that there are too many variable and unknam.factors
involved to make a really fair canJ:Brison possible.
However, we know that City Officials and Water Department employees
are often asked how the Salina rates compare with those in other cities,
and for this reason we believe infonnation on the subject may be of value.
FACTORS AFFEC'l'ING wVATER RATES. In reviewing these different rates, it
should be kept in mind that there must be considerable variation in water
rates between cities, because there are so many factors affecting the
rates, some of which are: methods of financing, charges for fire protec-
tion, IIfree" water furnished, ownership of meters and services, debt
charges, depreciation charges, allowance for future extensions and im-
provements, type of consumers, difficulty of serving area, water treat-
ment costs, pumping costs, valuation of plant and property, age of system
source of supply, types and sizes of mains, amount of storage available,
labor rates, and innumerable other items.
However, the general public does give consideration to the charges
made for water in other cities since newspapers and magazines often try to
canpare water rates of various cities by publishing the prevailing rates,
and since many small cities have established their rate schedules by
comparing them with neighboring cities of about the same size; therefore,
we offer the following canparisons for general information.
...
,-
-32-
CITIES USED FOR COMPARISONS; We have compiled the water rates of all cities
in Kansas which have a population of over 10,000. The data has been tabu-
lated in three groups, as follows:
1. Cities of the First Class - Larger than Salina
2. Cities of the First Class - Smaller than Salina
3. Citie$ of the Second Class - Over 10,000 Population
The minimum rate and the rate per 1,000 gallons for various steps has
been tabulated as follows on the next page.
CURVES FOR COMPf,.RIIDN OF W.t.TER RATES. It is often easier to visualize the
...
comparison of rates when they are presented graphically. Therefore, we
have prepared 3 sets of curves on Plates 3, 4 and 5 ~ich follow the
tabulations on the next two pages.
These curves show the rates charged in cents per 1,000 gallons for
various quantities between 3,000 gallons per month and 3,000,000 gallons
per month, for all the First Class Cities in Kansas and all the Second
Class Cities with populations over 10,000. These curves show graphically
the same information that has been tabulated on the following pages.
.
'C
-33-
TABlE A
COMPARISrn OF WATER RJ.TES
FlRST CIASS CITIES IN KANSAS - lARGER THLN SALINA
, Minimum , , Water Usage in Gallons per month
I 'Water ' f I r , ,
t Popu- 'Char~'Incl.'3,000'10JOO0130,000'100,00011,OOO,000'3,000,000
City , 1ationl~ 'Gals.' 1 Rate in Cents per 1,000 Gallons
, 1 1 1 1 , 1 1 ,
Wichita , 185,366 '$0.94 13,0001 31.3' 31.3 ' 25.0 ' 17.5 , 1.5 6.25
, 1 1 . ,
Kansas City' 148,254J 1.00 '3,000' 33.3' 25.0 , 25.0 12.0 1.0 1.0
I ~ 1 , ,
Topeka 89,8101 0.35 ' 1501 40.0' 22.1 , 22.7 , 22.1 ' 15.35 15.35
j i ,
Hutchinson' 31,814 , 1.00 '3,,150~ 26.7' 26.7 ' 16.7 ' 10.0 , 4.1 4.7
\ , J , ,
Salina 26,923' 1.15 '5,138' 22.5' 22.5 ' 18.0 ' 14.0 ' 7.5 1.5
, , , ,
I
""
City
Salina
Pitts burg
~
leavenworth'
I
Lawrence t
,
Coffeyville'
1
Pars ons t
1
A tchis on '
Ft. Scott
TABIE B
COOARISON OF WATER RATES
FIRST ClASS CITIES IN KANSAS - SMALIER THAN SJL INJ.
Minimum Water Usage in Gallons per Month
1 Water , '" ,
Pop~- 'chargeIInc1.'3,OOO'10,OOO'30,000'100,000'100OOO,000'3,OOO,Ooo
lation' $ 'Gals.' . Rate in Cents per~, 0 Gc1.1ons
, , , , , , , ,
26,923'$ 1.15'5,138'1. 22.5' 22.5 ' 18.0' 14.0' 7.5 ' .7.5
" ,
25,427!
I
21,183 '
,
18,499'
,
17,898'
,
15,567'
t
12,428t
10,4191
I
Q.10'2,OOO'
, I
'1.00' 1,500~
, ,
'1.40'2,0001
, I
,
1.00'4,000!
, I
0.50'1,250
,
35.0' 35.0 ' 25.0 '
,
22.0' 22.0 ' 22.0 '
,
40.0' 37.8 ' 32.2 ·
,
25.0' 25.0 ' 20.0 '
,
4.5
13.5
9,0
25.0 16.0
16.0
;:0..0' 14.0
9.0
16.2' 10.8
10.8
20.0' 15.0
, '
40.0' 35.0 ' 40.0 I
,
27.0' 13.5
t
11.0 f 11.0
0.10'4,000 35.0' 35.0 ' 32.0 '
, ,
2.00'6,000 33.J 26.1' 26.7 '
!
20.0' 10.7
8.0
-34-
TABlE C
COMPJ,.RISON OF WATER RATES
SECOND CLASS CITIES OF KNASAS WITH POPUU..TION OVER 10,000
Minimum Water Usage in Gallons per month
'Water' I , , ,
Popu- t ChargeInc1"3,000'10kOOO'30,000'100,000'~00,000'3,000,000
City 1ation' $ 'Gals' 'ate in Cents per 1, gallons
t , , , , , I ,
Manhattan , 15,132'$ 2.50'7,5001 33.4' 33.4 ' 33.4 ' 30.0 , 23.3 2J .0
, , ,
Er.1poria , 14,692' 0.30'None I 25.0' 25.0 , 17.0 , 17.0 , 9.0 9.0
, , I ,
Arkansas City 13,135' 1.00'3,000' 33.3' 33.3 ' 16.1 ' 11.1 I 11.1 11.1
, , , , ,
Junction City 12,920' 2.25'6,750' 33.3' 33.3 ' 33.3 ' 26.6 , 16.0 14.0
, , , , ,
Independence' 12,016' 1.00'1,,001 30.0' 20.0 ' 15.0 I 12.0 , 11.0 il.O
.. I , , I I
E1 Dorado , 11,887' 1.00'3,000' 33.3' 33.3 I 16.1 , 11.1 I 11.1 11.1
, , ,
Great Bend ' 11,721 i 1.00'4,,001 22.1' 20.0 ' 13.0 , 10.0 , 7.0 , . 7.0
, , I ,
Newton I 11,222i 0.15'4,22,' 21.8' ~1.8 I 21.8 ' 13.3 ' 9.3 9.3
, , I I
Chanute 11,181 ' 0.50' 1,500' 40.0' 28.0 1 28.0 , 16.0 , 16.0 16.0
, , , I
Dodge City , 11,068' 1.,0'3,000' 50.0' 30.0 1 20.0 ' 10.0 , 10.0 10.0
, , I ,
I , , ,
Salina , 26,923, 1.15.,5,138, 22." 22.5 18.0 14.0 7., 7.5
>>
-35-
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, - I , I ' . ,1 w'LSOf-& COMPAN I
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___--.J...-~_______._~_J___________ ~~___!_..O....-----l_______~__ _ ______-'-_ --'--_~______ ..-,
PLATE Y
. I
30,00
!
.
ANALYSIS OF RATE COMPARISONS. Some Salina citizens feel that the present
water rates here are relatively high,; however, by comparison with otoor citie~
of Kansas that is not the case, It will be noted from the preceding tabu-
lation and curves that:
1. Salina has the lowest overall wator rates of too 12 cities of the
First Class in Kansas.
2. Four of the First Class Cities make a lower minimum charge than
Salina, but they include much Je ss water in the minimum allowance. When
the quantity of water included in the minimum rate in those four cities is
increased to the 5,138 gallons included at salina" it makes each of them
have a considerably higher rate than Salina.
3. The comparison of Salina's present water rates with the larger
Second Class Cities of Kansas shows a similar favorable result, as all of
too larger Second Class Cities have higher minimum rates than Salina when
the Bame quantity of water is included; only Great Bend and Newton have slight
1y lower overall rates and both of these cities provide untreated well water.
4. Therefore,. 'When it is realized that too present Salina rates pro-
vide for the construction and operation of the proposed water softening plant,
as well as the operation of the present watervlorks system, there should be
no criticism of the existing water rates in Salina.
t
/III
-36-