Water utility predicts 6% revenue loss due to coronavirus pandemic

LITTLE ROCK — Central Arkansas Water anticipates a 6% reduction in revenue in 2020 as a result of the coronavirus pandemic, Chief Executive Officer Tad Bohannon told the utility’s board of commissioners Thursday.

The utility’s suspension of shutoffs, lower water use by customers and uncollectable balances will result in an estimated $4,248,400 in lost revenue this year, Bohannon said.

Through Dec. 31, the utility expects $1,060,000 in financial impact from suspending shutoffs, a loss of $1,296,000 in residential billing, $1,015,000 lost in commercial and industrial billing, $679,000 lost in irrigation billing, and $28,400 lost in wholesale billing, as well as a $170,000 in collections, which represents a 57% increase in uncollectable balances.

Bohannon emphasized that the numbers he provided to the board were preliminary and that it would take a few more billing cycles for the utility to get a clearer picture of how covid-19 would impact its revenue.

Because of the pandemic, the utility has suspended shutoffs to ensure that people would have water “if nothing else just to wash their hands,” Bohannon said. He added that the utility was one of the first in the country to do so.

The utility has taken several steps to control costs amid this year’s economic uncertainty. Those include cutting operations and maintenance expenses by $825,000 and reducing capital expenditures by $3,035,000.

The water utility is also delaying hiring for nonessential positions.

Spokesman Doug Shackelford said the utility will reevaluate those cost controls once the pandemic passes.