City council members Monday cast a split vote to apply for a loan from a Kansas Department of Health and Environment revolving loan fund.
The loan would be used to replace aging water pipes for 1/3 of the town.
Councilman Jerry Kline voted against the measure to apply for the 20-year loan for an upcoming $3.9 million water line replacement project. Council members Todd Heitschmidt, Susan Gray, and John Wheeler voted in favor.
The vote came after members of the public urged council members to find a different way to fund the project. When the possibility of applying for the loan was discussed last month, city administrator Roger Holter said base rates for water service would increase $17.73 a month, making it $47.73. Information presented to the council Monday estimated new base water rates would rise $20.11.
Darvin Markley told council members Monday that Marion’s base rate for water service, at $30 a month, already exceeds base rates charged by McPherson, Herington, Hillsboro, and Abilene.
Marion charges $5.05 for 1,000 gallons of water. McPherson charges $2.42, Hillsboro charges $4.92, and Abilene charges $1.85. Herington allows 1,000 in the base rate, and charges $5.88 for each 1,000 gallons after that.
Markley said raising basic water rates would give the city no way to encourage conservation of water during droughts by raising rates higher because residents would already be paying a high price.
“We’re going to kill our economic development with that,” Markley said.
Markley said also he thinks the city will be overloaded with debt if it goes forward with the project now.
“We’ve got to slow down and take care of what we can,” Markley said. “The water line needs fixed, there’s no doubt about it.”
Ruth Herbel, a candidate for city council, told council members many community members are on fixed incomes and would be hit hard by a water rate increase.
The city applied for, but did not get, a grant to help pay for the project.
“This could have been a good project until we lost the grant,” Markley said.
Markley said that earlier water rate increases should have been set aside to help pay for new water lines.
“To me, we should have $1 million for this project,” Markley said.
He said many of Marion’s water meters don’t operate properly and KDHE’s program will require those meters to be replaced.
Kari Newell asked council members where money would come from if the project goes over budget.
David Mayfield, a candidate for mayor, said if the council decides to move forward with a loan for the project, he hopes that capital improvement funds will be used.
Water project financing was originally arranged through a United States Department of Agriculture loan at 3.125% interest, but interest rates dropped to 2.2% for KDHE’s revolving water loan fund.
Holter estimates the city could save about $1.7 million over the life of the loan because a KDHE loan has a lower interest rate and a 20-year term.