Water rate increase approved by board
The Hot Springs Board of Directors moved the city closer Tuesday night to bringing its Lake Ouachita water allocation online, unanimously approving the rate increase critical to financing the $95 million project.
The board acknowledged that increasing the minimum monthly charge for a residential five-eighths inch meter inside the city from the current $4.99 rate to $13 by 2021 will work the biggest hardship on customers with fixed incomes.
The concern for current ratepayers notwithstanding, the board said it is also responsible for ensuring the longterm viability of a system serving more than 35,000 meters, half of which are beyond the corporate limits.
Bringing the 23 million-gallon average day allocation online will allow the city to meet demand until at least
2037, according to the updated water supply study the city’s water system consultant, Crist Engineers Inc., presented earlier this year.
The minimum charge for customers outside the city, who pay a 50-percent premium for service, will increase from the current $7.50 rate to $19.50 by
2021. Rates for residents and nonresidents will increase 3 percent a year after 2021.
The minimum charge is assessed on the first 1,000 gallons of usage. Volumetric charges are applied to usage exceeding
1,000 gallons. Customers will see the increase on the first bills rendered in January, with the minimum monthly charge increasing $3 for resident customers and $4.50 for nonresident customers.
Deputy City Manager Bill Burrough told the board that posterity will thank it for the action it took Tuesday night. The capital improvements financed by four bond issues planned to be sold over five years include a 15 million-gallon a day treatment plant, which would be the first built by the city since the Ouachita Plant that opened in
1967.
It treats the allocation derived from the city’s withdrawal agreement with Arkansas Entergy Inc., providing up to 30 million gallons in a single day from upper Lake Hamilton. Per the 2005 agreement, the city’s usage cannot exceed a 20 million-gallon a day average calculated over a three-month rolling period.
The city had previously relied exclusively on the Lakeside Plant that went online in 1947. It treated water from three small lakes on the north side of the city that are no longer in service. It currently processes raw water from the city reservoir at Lake Ricks.
The small-capacity plant can treat up to 5 million gallons a day, Burrough told the board.
“This is a huge decision and accomplishment in my opinion,” Burrough said, noting that Tuesday night was the evolution of a process that began in 2004, when the city first approached the U.S. Army Corps of Engineers about reallocating part of Lake Ouachita’s hydropower pool for municipal supply. “The city hasn’t built a plant since
1963. I’d like to think back to
1963 and see a board that was extremely proud when they were able to build such a plant.”
District 5 Director Karen Garcia told the board she’s committed to implementing the
H2O Help to Others program instituted by other water systems, a program she said would provide relief for low-income ratepayers through contributions customers can choose to add to their water payments. She said she will work to have the program in place by next year.
District 4 Director Larry Williams said he voted for the rate-increase ordinance despite city staff’s unwillingness to explore decreasing the $4 a month stormwater charge customers inside the city pay. He proposed decreasing it to $2 or $3 to partially offset the water rate increase but said city staff hasn’t shown interest in pursuing the proposal.
“It’s fallen on deaf ears,” he told the board. “I didn’t get any feedback from staff. I think it ought to be looked at, but I won’t hold the ordinance hostage.”
Eight people spoke in opposition to the ordinance, many of whom were part of the coalition that organized successful referendum petition drives earlier this year against annexation ordinances the board adopted last December.
They pledged earlier this month to do the same for the rate-increase ordinance, which won’t take effect until 30 days after the ordinance is published in the newspaper. In that time, petitioners can collect signatures in support of a referendum on the ordinance. The signatures of more than 1,400 registered voters residing inside the city are needed to trigger a special election.
Diane Silverman of the Garland County Tea Party told the board a public, town hall meeting needed to be convened before the city went ahead with the rate increase. She and other speakers who addressed the board Tuesday night questioned the urgency the city has shown in pursuing additional water supply, explaining that the current supply and treatment capacity could be better leveraged to meet future needs.
They pointed to the percentage of treated water that leaches out of aging transmission and distribution lines and a storage system they said could be used more efficiently.
Burrough said 1,744 new connections have been approved since the city’s production exceeded 80 percent of daily capacity more than 50 times in 2012. Of those, about half have connected, he said. The Arkansas Department of Health requires systems to begin planning for additional capacity and supply when the 80-percent threshold is reached.
The Health Department said last week that while the requirement isn’t enshrined by statute or regulation, the state is authorized to impose a moratorium on new connections until a system begins planning for additional supply in earnest.
Burrough said that in addition to the Lake Ouachita allocation serving the future needs of the system, it is also needed in the present to guard against service interruptions at the Ouachita Plant and prolonged stretches of dry, hot weather that can tax current production capacity.
“The only difference between today and 2012 is that we have more users on the system and milder weather,” he told the board. “We cannot rely on the weather to ensure we can provide water to our citizens and our community.
“It’s my believe that in 2018, if we have 95-degree weather for 30 days with no rain, we’re not going to be able to produce water for some of our users.”