Iola City Council members remain in a wait-and-see mode to learn if negotiations between Iola and Gas will allow for Iola to increase the price of the water it sells to Gas.
The 30-year pact between the cities — established in 2001 — allowed for Iola to institute six rate increases over the life of the contract.
“We’ve already reached the six rate increases,” Iola City Administrator Carl Slaugh told Council members Monday.
Gas officials balked when informed of Iola’s latest rate increase instituted earlier this year.
“It’s hard to second guess (Iola’s point of view) when this agreement was passed in 2001,” Slaugh said, but allowing a limited number of rate hikes over such a lengthy period has put Iola in a jam.
“Even (Iola’s City Commission) felt, when the water plant was built, somehow they could get by without a rate increase,” Slaugh continued. “They had $2 million in reserve at that time.
“But that $2 million was quickly used up,” Slaugh continued, and by the close of the decade, the water fund was in a deficit, and was supplemented by other utility funds.
Since then, Iola continues to struggle to make ends meet and make the annual $600,000 payment for the water plant’s construction, on top the city’s operating expenses.
Slaugh dismissed the notion that Iola raise rates for everyone else, but leave the rates for Gas untouched.
“We need to keep those (wholesale) rates constant,” Slaugh said. “I don’t think it’d be wise to continue at that rate for the next 15 years until the agreement expires.”
Slaugh estimated it would cost Gas more than $2 million to hook up to another wholesale water supplier, such as Rural Water District No. 5.
Council members directed City Attorney Bob Johnson to continue negotiations with the Gas city attorney, “and we’ll take another look at it in another month,” Councilman Jon Wells said.
RICHARD “BUD” Jones, who has worked for the city for the past 30 years, is retiring this month from the Street and Alley Department.
His retirement was among the personnel actions approved by Council members Monday.
The Council also accepted the resignation of Nathaniel Keylon from the Iola Fire Department and hired Denver Mitchell for the Fire Department. The Council also voted to rehire Anthony Hutton for the Sanitation Department. Hutton previously worked for the city from 1994 to 2011.
