Eureka Springs Mayor Butch Berry wants the city to chart a new course, saying city government – going back a few years – has spent just over $800,000 of reserves to make up the difference for what had to be spent to keep the city’s water and sewer operations in compliance with state regulations.
“The city no longer has reserves to loan to water and sewer; we have depleted these funds,” states literature from Berry’s office.
“There was a time we were not in compliance,” Public Works Director Dwayne Allen said in an interview last week. They city has made some improvements over time and, according to Allen, is no longer on the Arkansas Department of Environmental Quality watch list.
Berry’s data states the new sewer plant came on-line in 2008 and construction costs were covered by bonds, but “the annual cost of sewer plant operation and maintenance, $357,000, was never projected in the construction stages.” Since then, the city has lent funds from General Fund Reserves to account for what water and sewer revenue did not cover, which has been approximately $800,000 since 2013.
“A city of 2073 residents is burdened with maintaining an infrastructure supporting over a million visitors annually,” according to Berry’s fact sheet. In addition, the aging infrastructure delivering water needs upgrades.
Berry has proposed a one percent sales and use tax which voters would have to approve on the Nov. 8 election. The tax would have a 10-year sunset, and city hall estimates the tax would generate $1.1 million annually. His plan is for 75 percent of the funds, or as much as $825,000 annually, to be dedicated to water and sewer infrastructure repairs and improvements. The remaining 25 percent, or approximately $275,000, would be for maintenance, operations and promotions of the Auditorium. Auditorium funds would be administered and watched over by an Auditorium Commission.
Berry said funds from the tax could begin to flow into the city as early as January 2017.
Water and sewer
“We’ve had a plan in the past but we’ve never had an opportunity to do anything with the plan,” Allen said. “It takes money to implement it.” His ten-year and five-year plans identify repair and rehab projects around town, but he commented, “We know what the first investments will be.”
Allen’s figures indicate Public Works currently spends $157,000 annually on purchasing required chemicals that keep the sewer operation in compliance. Buying chemicals in bulk would result in significant savings, but Allen would need a place to store them. Berry’s numbers show a storage facility and tank for the chemicals would cost $125,000, and Allen estimated he would spend $79,000 for bulk chemicals, an annual savings of $78,000.
Allen said he spends about $188,000 every year for utilities. He estimated if he spent $75,000 for an additional generator, he would save $57,000 a year by switching from the electricity provider to the generator during peak use hours. He commented this practice is common among similar facilities, and this investment would be cost-effective during the second year.
In addition, Public Works is required to have treated wastewater tested at a certified lab. Allen said he must send his samples to a certified lab in Springdale even though his staff takes the samples and handles all paperwork. He spends “about $18,000 a year” for testing. He estimated if he spent $30,000 to build out and fully equip the existing lab, the city would save that $18,000 per year. Again, he noted the investment would pay for itself the second year.
He also said the State would train his staff at no cost to get the lab certified, so he would not need to hire new employees.
Allen said the investments would produce a cost savings, which would continue to benefit the city thereafter, but it is the tax that enables the city to make the investments. With the limited revenue he works with now, he said, “You look at what you can cut, but we can’t cut back when it’s drinking water, so we become a drain on the general fund.” An example he gave was recently the city bucket truck needed repairs, so Public Works could not take down banners before getting it fixed. “Certain things you gotta keep repaired.”
He said Public Works has a jetter for cleaning out clogs, but it is not up to some of the tasks it encounters, so he has to hire someone for the job. He mentioned what he really needs to fix the jetter is a carburetor from a 1986 Ford 4-cylinder vehicle. Until he gets a new jetter or a carburetor for his old one, he spends money to hire out the job.
Also on the list of early investments would be a better camera for scouting out leaks. He said the camera he has in mind would quickly pay for itself because it would allow workers to stay ahead of the leaks by identifying potential weak spots.
Berry said funds from the tax would allow Public Works to start working on repairing distribution lines along Spring Street, where there are identified leaks, as well as replacing 1000 ft. of the distribution line along North Main.
He said his plan is for the one-time investments totaling about $245,000 to bring about annual savings in operating and maintenance costs of about $174,000. Public Works could use the savings, not the tax revenue, to pay back the General Fund Reserves over five years. He also emphasized the city would maintain a transparent tracking system so revenues and expenses from the tax are not mixed with other finances.
Allen commented his department has used its resources wisely over the years, but water and sewer are supposed to be self-supporting and they have lagged behind. Regarding the proposed one percent tax, he remarked, “From an environmental and health standpoint, we think everybody would want to be on board with this.” He said if his workers could stay ahead of the leaks in the distribution system, they would not only be saving money for the city, they would also be making a difference in quality of the water.
“We’re all drinking this water. We’re all in this together. If you’re living here, you’re involved in this,” he said.
The Auditorium
Berry said the community asked for a change in how the Auditorium is managed, and two Auditorium Committees have recommended establishing an independent community commission to take over all management, maintenance and operational responsibilities. He said he would bring an ordinance to city council establishing the commission as soon as the tax passes, and some citizens who participated on the recent committee would be likely candidates.
In addition, the City Advertising and Promotion Commission has been given, and accepted, a directive to make clear how it will continue to support the Auditorium after the tax passes. They would also have the challenge of charting their participation if the tax does not pass.
Berry said CAPC commissioners have already discussed redirecting the $110,000 they spend now on maintenance of the facility toward additional promotion of shows.
Berry mentioned the new commission would establish five- and 10-year plans like Public Works has in place. The goal would be for the Auditorium to be self-sustaining after the tax sunsets in 10 years. “We cannot afford to go back at the end of ten years to where we are now,” Berry contended. The commission would at some point have funds to match grants for renovating the building, such as waterproofing the backside or installing an elevator to the basement so it could become a more usable venue again, even a revenue-generator.
Berry commented it will take awhile for the commission to get moving forward, but previous commissions did not have a steady revenue stream like this one will have if the tax passes. “The tax would give citizens a solution. It’s time to quit blaming people and take the initiative and do something positive for ourselves. Some people might be upset with how the CAPC uses its funds for advertising the city, but they bring folks to town, and this is our revenue stream for the whole community. We all have to play together better.”