Cities Question Water District's Role by Judy Jacobs and Dave Ranney "The Wichita Eagle" Sunday, October 5, 1997 In the good old days, is a farmer wanted a warm bath and a flush toilet, he had to join the nearest rural water district. For him, the district was a godsend. But in the 1990s - a time when thousands of Kansans are looking at homes in the suburbs - the role of the state's 300 rural water districts is being questioned. Increasingly, developers and city officials say the districts are hampering their ability to build and grow. "One of the major aspects of planning for growth is how to extend the infrastructure," said Chris McKenzie, executive director of the Kansas League of Municipalities. "These (rural water) issues are a major impediment to that planning." Relying on federal start-up loans, most water districts in Kansas were formed in the 1950s to provide water to people - farmers, mostly - whose homes were in the country. Many developers - the people wh wanted to build neighborhoods in the country - would rather get their water from the nearest city, where, they say, the water is probably cheaper, under greater pressure and of higher quality. But many areas ripe for suburban development are in a rural water district's territory and, under Kansas law, cannot be hooked up to a city's water supply unless the district is compensated. There's also a federal law that says a water district's right to compensation includes its undeveloped areas. A developer who wants to build homes on a 100-acre field of milo still has to pay the water district - even though the district doesn't have any lines in the area. These laws, developers say, get in the way of progress. District officials, however, say they have debts to pay and shouldn't be expected to give away future earnings. These are not friendly disagreements: Last year, Johnson County Consolidated Rural Water District No. 6 filed a suit over how much the city of DeSoto owed the district after annexing some of the district's territory for a development project. The district wanted to be paid for the loss of potential customers. City officials thought that was unreasonable. Johnson County District Court ruled in the water district's favor. The ruling was upheld by the Kansas Court of Appeals. The city of Ellsworth and Post Rock Rural Water District No. 1 are feuding over who will provide water to a county-run hospital being built one block outside the city limits. The case is now in U.S. District Court in Wichita. The water district has had similar disputes with the cities of Russell, Wilson and Lincoln. A Wichita-based developer, Bill Lusk Jr., wants to build 200 houses and a small shopping center on 210 acres just north of the Kansas Coliseum. Park City annexed the area last year and has agreed to supply it with water. But the area is within Rural Water District No. 2, and district officials say they're entitled to a 35 percent surcharge on each home's monthly water bill to offset their loss of potential customers. Jack Whitson, Park City's director of economic development, says a fee of 1 percent to 5 percent would be acceptable. But 35 percent, he says, is outrageous. The district also wants Lusk to pay it at least $705 for each home. Lusk says the hookup fee is unjustified. Lusk and Park City are each suing the water district in Sedgwick County District Court, claiming the city is obligated to compensate the district only for its investment in the area, which, up to now, has been minimal. At the same time, the water district is suing Park City in the U.S. District Court, claiming that the 210 acres plays a vital role in its future. Without it, officials say, the district would have trouble paying off its debt. "Our job is to protect the district in its entirety," said Clem Rasmussen, a Rural Water District No. 2 board member. The district's board members say that as long as the district is in debt, its territory is protected by federal law; it's the federal government's way of protecting its loans to rural water districts. Records show that the 25-year-old Rural Water District No. 2 still owes $167,412 on its original loan. Paul Carey, Chairman of the water district, says Lusk's development would hurt the district's ability to pay its debts, primarily its federal start-up loan. "He wants to take the heart of the district," Carey said. "And we can envision Park City expanding from this, maybe leaving us with half of what we have." He added: "We have to protect the remaining customers of the district. That's the responsibility of the directors, that's our only purpose." But Whitson, Park City's director of economic development, says the water district is trying to make the city and Lusk take all the risks. "They're wanting us to build the lines, maintain the lines, stand behind the bonds, do the billing . . . and then hand them over a nice hefty check every month," he said. And it's worth noting, Whitson said, that the water district doesn't have its own treatment plant - it buys treated water from Valley Center, which won't guarantee enough water for 200 homes - and doesn't have the money for putting in the lines. In the face of such disputes, the Kansas League of Municipalities wants Congress to figure out a way to protect water districts' finances without stunting cities' ability to grow. "The way the law is now, as long as a water district is in debt, it can obstruct the orderly growth of a community," the league's McKenzie said. "I doubt if that's what Congress had in mind." So far, the legal wrangling hasn't addressed the broader issue of doing what makes the most sense for Kansans, said Elmer Ronnebaum, general manager of the Kansas Rural Water Association. "It sounds simple, but I don't know how else to say it: People need to be good neighbors," Ronnebaum said. "All public water supply systems - rural and urban - should provide customers with water in whatever manner they're most capable of providing and in whatever manner is the most economical. "I don't know how anyone could argue with that, but these turf issues keep coming up more and more."