Board pulls water rate increase for second time

An increase to the minimum monthly water charge was pulled from the Hot Springs Board of Directors’ agenda for a second time Tuesday over concerns the enabling ordinance didn’t explicitly state the purpose for the additional revenue.

Several directors asked if the ordinance could include language dedicating bonds secured by the rate increase to capital improvements for the water system, prompting the board to postpone action on the increase until its Nov. 21 business meeting.

City administration has said the rate increase will service debt the city plans on issuing over the next five years for

$110 million in capital improvements to the water system that serves more than

35,000 accounts in Garland County. Most of the indebtedness will pay for infrastructure providing customers with water from the 23 million-gallon average day allocation the city acquired from Lake Ouachita earlier this year.

In addition to the $95 million the city estimates it will cost for a Lake

Ouachita intake, raw waterline,

15 million-gallon a day treatment plant, and distribution system,

$15 million of the debt would pay for new switchgear controlling transmission line pumps at the Ouachita Plant on upper Lake Hamilton, a water storage tank and improvements to dams impounding three small cityowned lakes formerly used for water supply.

The city plans to issue the debt in four installments, offering $20 million in revenue bonds next year and $30 million in 2020, 2021 and 2022. Mayor Pat McCabe told city staff the ordinance needs to include language binding the bond proceeds to the four projects.

“That wording really has to be in there, so a future board doesn’t say we don’t need this and you have a half built plant with no water and everybody has been paying for something they’re not going to get,” he said. “Let’s get the wording right and make sure everyone is comfortable.”

The ordinance was pulled from the Oct. 17 agenda after directors questioned if the need for the rate increase had been explained to the public. It will raise the monthly minimum charge $3 starting next year,

$2 in 2019 and 2020 and $1 in

2021. The proposed rate structure would increase the current

$4.99 minimum charge 160 percent by 2021.

A wastewater rate increase was also pulled from the Oct. 17 agenda. Deputy City Manager Bill Burrough told the board Tuesday night the utilities department removed several capital expenses from next year’s wastewater budget, making the ordinance raising debt service and operation and maintenance charges next year less urgent.

“We won’t be bringing you a rate increase this year,” Burrough said. “We’re sensitive to the water rate increase, and we’ll be deferring some of these needs and coming back to you next year.”

District 4 Director Larry Williams told the board the water rate increase would overshadow the resolution approving the city’s $4.9 million contract with Motorola Solutions for an Arkansas Wireless Information Network-capable communications systems. The controversy that has coalesced around the rate increase would deprive the resolution of the attention it deserves, Williams said, explaining that deferring action on the increase will give the communications system top billing.

“I’d like for it to be the lead coming out of our meeting Tuesday,” he told the board. “The lead is the first sentence or paragraph of a news story. I’m not sure that happens if we approve these rate increases on the same night. I don’t know why we couldn’t put that off two weeks so that we can get maximum, maximum coverage on this new communications system we’ve been working on for 10 years.”