At Monday evening’s city council meeting, Eureka Springs Mayor Butch Berry presented a third strategy for raising water and sewer rates. He had previously presented the strategy for an increase of a flat fee on both water and sewer rates followed by a method he called a Bond Service Fee. His third strategy, which council eventually voted to endorse as a starting point for Wednesday’s town hall meeting, was a 21 percent increase on sewer rates, no increase on water rates but an additional Infrastructure Improvement (I&I) fee.
Berry distributed a chart explaining the effect of the proposal. Tier 1 users, totaling 792 accounts and 42 percent of the customers, currently pay for each thousand gallons of water used $11.20 for water and $9.50 for sewer which adds up to an average monthly bill of $20.70. With the proposed rate method, the monthly fees for sewer would go to $11.49 making the monthly total with a $5 I&I fee equal $27.69. This represents an increase of $6.99 per thousand gallons of water used.
There are 848 Tier 2 customers comprising 45 percent of the customer base. Currently they pay on average $24.48 for water and $26.84 for sewer. The sewer bill would increase to $32.47, which added to the water fee and a $10 I&I fee, would total $66.95, an increase of $15.63.
The remaining 13 percent are the 246 Tier 3 customers, and they currently average $1176.32 per month for water consumption of 8001 gallons or more, and for sewer they average $1430.61 for a monthly total of $2606.93 Under the new rate, Tier 3 sewer bill would increase to $1731.03 and the I&I fee would equal $50 making the adjusted monthly average equal to $2957.35, a net monthly increase of $350.42.
Berry said the rate increase would bring revenue from sewer rates to a break even point with expenses, and the I&I fee would go toward meeting the bond covenant. He expects the proposed rates would provide an increase of $459,775 annually allowing the city to pay off one of the bonds in three years and the other one in 10 years. He stated the plan is fairly distributed across all customer levels and would give the city an opportunity to be debt-free for the first time.
Alderman Terry McClung commented the plan seemed fairly simple and it seemed to work, and alderman David Mitchell said it addressed concerns aired by citizens. He especially liked paying off bonded indebtedness, allowing the city to spend resources on rebuilding infrastructure instead of paying down debt.
Alderman Kristi Kendrick disagreed the proposal was ideal, although she acknowledged it was the best proposal so far.
Mitchell asked City Attorney Tim Weaver if he saw anything wrong, and he replied it looked okay, and would provide a fund for the future.
Vote to adopt this model as the city’s formal presentation for Wednesday’s discussion with the public was 5-1 in favor, Kendrick voting No. There was back and forth as to whether the upcoming public conversation would be a town hall meeting, a workshop or an official public hearing. Berry had announced at the March 13 meeting state law requires council to set proposed rates for a sewer increase before it can establish the date for a public hearing regarding the increase. Weaver had even prepared an ordinance based on the proposed rate changes in case council wanted to get started.
After much deliberation about publishing notice of the rate increase in papers according to law, as well as allowing time for public input, aldermen eventually decided to conduct the first meeting with the public and at a later time consider the ordinance and set the date for the official public hearing.
A bump in the road
Some residents on East Mountain had presented requests for the city to reconsider placing speed bumps on the thoroughfare. Others had asked for another one. When the matter came up, McClung said he thought it was an administrative decision, not an issue for council, and other aldermen agreed. Thomas stated the Police Department should control traffic with or without speed bumps.
Mitchell told Berry he agreed council should “shuffle it over to you,” and Berry said he was okay with their decision.
During Public Comments, Leon Burt quoted former alderman James DeVito’s statement that “Protecting neighborhoods is imperative to the welfare of the community. We are a living, breathing town with people who live and work here.” Burt applied the intent of the quote to the situation regarding speed bumps on East Mountain, and advised “the Planning Commission and the Police Department [to] study the issue objectively and implement a solution that both parties would accept.”
Also in Comments, Justice of the Peace Lamont Richie asked how the city would know if its plan to raise water or sewer rates was objective and even-handed. He said he would “object to a fee increase until you figure out whether you have a fair and equitable rate structure.”
Eric Knowles suggested the city charge a fixed rate per gallon used for water and sewer instead of the tier structure in place now. “Use a gallon, pay for a gallon,” Knowles said.
There will be an open discussion regarding water and sewer rates Wednesday, March 29, at 6 p.m. at the Auditorium.
Next meeting will be Monday, April 10, at 6 p.m.