LR wastewater utility’s budget for ’24 gets OK

Commissioners give nod; discuss goals for new year

The Little Rock Water Reclamation Commission during a meeting on Wednesday voted to adopt the 2024 operating and capital budget for the city’s wastewater utility.

Commissioners gave approval in a unanimous voice vote.

Next year will be the Little Rock Water Reclamation Authority’s first full year with Jean Block at the helm as chief executive officer following the retirement of former CEO Greg Ramon.

Block assumed the role effective Aug. 14 after previously serving as the utility’s chief legal officer.

The utility serves some 71,000 customers, the vast majority of them residential.

During the meeting on Wednesday, Michael Rhoda, the utility’s chief financial officer, said goals for 2024 include a transition from activities focused on compliance with a consent administrative order to a preventative maintenance program for critical assets.

The consent administrative order tied to a 2001 settlement with the Sierra Club is expected to conclude at the end of this year.

Roughly $500 million has been invested by the wastewater utility in an effort to improve the collection system and reclamation facilities and meet its obligations under the order, according to the 2024 budget book.

In the wake of those upgrades, Rhoda said officials want to optimize the operations of the collection system and facilities in order for them to be able to handle wet weather events and eliminate overflows.

Also in 2024, officials want to identify funding sources for the utility’s longterm operating and capital improvement plan, which likely will take the form of additional bond issues or perhaps rate increases, Rhoda said.

There is no rate increase outlined as part of the 2024 budget and capital improvement plan. The most recent rate increase took effect Jan. 1, 2021.

Officials project revenue in 2024 to be nearly $68 million, up 1.1% from the revenue budgeted for 2023. Operating expenses are expected to total $34 million, up 4% compared to the 2023 budget.

According to Rhoda, the operating surplus of close to $34 million will be used to service the utility’s debt and invest in capital improvement projects.

The 2024 capital improvement plan calls for roughly $35 million in spending.

Total expenditures, including operating expenses, debt service and reserve-funded capital improvements, are expected to be roughly $93 million compared to nearly $87 million in revenue and bond proceeds, resulting in an overall annual deficit of $6.5 million.

However, heading into 2024 with an anticipated $72.6 million in non-restricted cash reserves, Rhoda said the utility had “more than enough cash on hand to handle a year of deficit.”

The utility expects to pay out $676,000 more in salaries in 2024, an increase of 4.7%, mostly due to an across-theboard pay increase of 3.5% that will take effect Jan. 1, according to the budget book.

The 2024 budget makes no change to the utility’s fully staffed headcount of 221.

Spending on contract services is anticipated to increase by $406,000, or 7.4%.

Public outreach, employee education and insurance costs are expected to rise by $318,000, or 28%, which the budget book largely attributed to “increases in property insurance premiums, employee professional development programs, costs associated with pursuing Federal grants, and the completion of an economic impact study.”

2024 will mark the beginning of “a significant multiyear project to enhance the processing of solids,” according to the budget book. The capital improvement budget will fund “the purchase of land for the disposal of biosolids which is anticipated to decrease future operating expenses related to their hauling and disposal.”