LR board to vote on measure opposing 10-year water-rate hikes

A proposed resolution expressing Little Rock’s opposition to a 10-year schedule of rate increases recently approved by Central Arkansas Water will be up for a vote at the next meeting of the city’s Board of Directors on Feb. 21.

The city councils of both Little Rock and North Little Rock — the two cities that created the regional water utility in a joint effort over 20 years ago — will have to vote against the Central Arkansas Water rate increases to block them from taking effect.

Absent disapproval by both cities, the first set of new rates is scheduled to go into effect July 1. Subsequent rate increases will become effective January 1 of each year through 2032.

Little Rock City Director Lance Hines, who represents northwest Little Rock’s Ward 5, is the sponsor of the resolution before the Board of Directors.

At a city board meeting Tuesday, Hines asked that Section 2 of the proposed resolution be struck based on feedback he said he received from J. Shepherd “Shep” Russell III, an attorney in the public-finance division of the Friday, Eldredge and Clark law firm.

Hines said Russell thought the language might cause problems with regard to the water utility’s bonding, which Hines said was not his intention.

The Ward 5 city director also said he would work to address some grammatical issues in the resolution.

The section at issue reads, “The City of Little Rock, Arkansas, residents shall be forced to accept these raises, and this indebtedness, without elected representation in violation of the Arkansas

Constitution.”

Central Arkansas Water General Counsel David E. Johnson disputed the taxation without representation claim laid out in the same section of the draft measure, according to an email provided to the Arkansas Democrat-Gazette by Central Arkansas Water official Chelsea Boozer.

In an email earlier Tuesday addressed to Central Arkansas Water Chief Executive Officer Tad Bohannon, Johnson wrote that while there was no case law on a consolidated waterworks system’s power to set and collect rates, a similar power existed for improvement districts.

“Numerous cases hold that, while the legislature may not delegate its general power of taxation, a specific, targeted power of taxation may be delegated to improvement districts for the purpose of levying and collecting assessments,” Johnson wrote.

He suggested that the same was true for Central Arkansas Water when setting and collecting rates as “a creature of state statute formed, at least in [Central Arkansas Water’s] instance, by two bodies of local government.”

Central Arkansas Water’s board of commissioners on Jan. 12 unanimously approved a rate resolution setting the 10-year schedule of increases.

The seven-member board

Officials believe the utility will need a significant infusion of new revenue over the next decade to pay for priorities such as infrastructure improvements and staff salaries.

is made up of four Little Rock representatives and three North Little Rock representatives who serve terms of seven years.

Central Arkansas Water officials believe the utility will need a significant infusion of new revenue over the next decade to pay for priorities such as infrastructure improvements and staff salaries.

They argue that even after the full schedule of rate increases takes effect, the cost per gallon of water will remain affordable, increasing from approximately half a penny per gallon based on current rates compared with one penny per gallon in 2032.

Among other changes, residential and commercial customers on a five-eighths-inch-diameter meter inside the city of Little Rock or North Little Rock will see their monthly base charge gradually rise from $7.85 today to $15.78 by 2032.