Salina Weighs Water Rate Increases to Speed Up Aging Water Line Replacements
The Salina City Commission held a study session Sept. 28 to review the city's water utility finances and consider options for accelerating the replacement of aging water lines, though no decisions were made.
Finance Director Debbie Pack told commissioners that the utility fund balance has dropped significantly in recent years, from more than $23 million in 2022 to just over $12 million at the end of 2025, as the city funded a South Water plant and a wastewater plant at roughly $40 million each. She said the current 2027 budget includes only about a 5% rate increase, which would drop the fund balance below the city's $5 million target.
Staff presented several five-year replacement plans benchmarked against an American Water Works Association recommendation of replacing 1% of a system's total mileage each year. According to figures presented, the city's system is approximately 338 miles, including about 77 miles of cast iron pipe, with roughly 65 miles of 1950s and 1960s cast iron identified as the priority for replacement.
The options ranged from Option A, replacing about 16.9 miles over five years at a cost of a little over $32 million with roughly a 49% rate increase, to Option D, replacing 50 miles over five years at a cost of approximately $121 million with about a 60% rate increase. Staff identified Option B — replacing about 25 miles over five years at a cost of roughly $48.3 million — as its preferred minimum option, noting it would complete the four identified target areas and could be designed and managed in house.
Pack said all of the A-through-D options increase the transfer to the capital reserve fund to $2.5 million a year and include $18 million in cash funding over five years. She said a one mill property tax raises about $570,000 a year, a 0.1% sales tax raises about $1.5 million a year, and a 1% rate increase on water, waste and sewer raises about $247,000 a year.
Deputy City Manager and staff said the commission does not need to decide today but must set 2027 rates before the end of the year. City Manager staff said they would return in about six weeks to refine the plans and gather feedback. Commissioner Gary Norris said the decision should be discussed in the community before commissioners commit to a plan.
