Financial crisis in Caney forces water rate hike, other action



Tightened purse strings and another increase to local water rates were the calls to action for the Caney City Council on Monday upon learning of continued tax revenue shortfalls caused by higher-than-expected operational costs at the City of Caney’s water treatment plant.


The City of Caney’s financial picture has become so difficult that councilors on Monday agreed with a recommendation from Mayor Dale McBride to suspend the search for a new city administrator and not renew a $25,000 contract with an Owasso, Okla.-based retail developer who was hired in 2011 to seek prospects for a new grocery store.

“If we hire a city administrator right now, I honestly don’t know how we can afford it,” said McBride.

McBride said the Caney City Council operates under a mandate by city voters who approved the city administrator position almost 15 years ago. However, that mandate does not spell out what should happen in the event the city government faces financial constraints while a city administrator position is open (the city administrator position became vacant in March due to the resignation of Don Whitman).


The City of Caney is using a service provided by the League of Kansas Municipalities in a search for a new city administrator. Michael Koss of the League of Kansas Municipalities advised councilors on Monday that failure to hire a city administrator could lead to greater problems for the community.  Koss presented councilors with a list of several interested candidates for the city administrator position.


“I think you have some good candidates here who can possibly solve this situation you are facing,” said Koss. “Without having someone who can lead and be accountable, you could probably create more problems.”


Even though McBride said he believed the City of Caney needed a city administrator, the community cannot afford that position at this time.


“We’re now in May, but we’re stretching our dollars like it’s the end of the budget year in November and December,” he said. “The dilemma is: if we are going to hire a city administrator now, how we are going to pay for it?”


Councilors agreed with a recommendation from McBride to suspend the search for a city administrator until the council can get a handle on the water treatment plant’s operational costs, which, McBride said, is the central issue for the tax revenue shortfall.


He noted that revenue from other city funds are being used to supplement the city’s water fund, which was designed to fully fund the operations of the water plant and distribution system. Several positions within the water plant are now being paid from other funds, and the cost for vehicles and fuel associated with the water plant are also having to be funded from other city coffers.


Water rate increase


That tax revenue shortfall also forced councilors to increase the usage fee of all water customers by 50 cents. The adjusted water rates will now be (for city residents) $2.85 per 100 cubic feet of consumed water and (for non-city residents) $3.10 per 100 cubic feet of consumed water. One hundred cubic feet of water is equal to 748 gallons of water.


The increase to the usage fee comes one month after the council voted to raise the base fee by $2. The newly adjusted base fee is $26.50 per month for city residents and $35.75 for non-city residents.


The 50-cent increase to the usage fee should generate about $44,000 per year, said McBride, which should help the City of Caney in closing the gap between operational costs and revenue.


“Sadly, that’s not the end of this,” he said. “And, it’s not going to take care of the whole problem, but it’s a start


“I cannot in good conscience raise the water rates so high — just so we can meet the actual costs of the plant — that people cannot afford it. That’s why we have to implement these water rate increases incrementally.”


On a related note, McBride said he sought the services of the Montgomery County Action Council’s new assistant director, Trisha Palmer, who has experience in the field of utility rates and governmental grant administration. McBride said he was hopeful that Palmer would provide some assistance and expertise as the city faces reduced coffers and higher expenses.


No more retail developer


Retail Attractions, an Owasso, Okla.-based retail development firm, was let go from the city council on Monday. May was the final month for the firm’s 12–month contract with the council.


Retail Attractions was hired in May 2011 at a cost of $1,250 per month (or about $25,000 in one year) to seek prospective grocery firms who might locate a grocery store to the community.


The cash crunch facing the community prompted councilors to vote unanimously to not renew the yearly contract with Retail Attractions.


Swim fees also increase


In keeping with the theme of “closing the gap” in Caney’s financial affairs, city councilors on Monday agreed to increase the admission fees at the Caney Swimming Pool.


The cost to operate and maintain the pool, which is nearing its 60th year in service, continues to grow. In an effort to recoup the costs of using chemicals to treat the pool, councilors agreed to raise the daily admission rates from $1.50 to $1.75, increase the 36-session swim pass from $45 to $50 and increase the family pass from $125 to $150.


The pool will open on Memorial Day for the start of the 2012 swim season, said Tina McCammon, pool manager.


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