Eureka Springs City Council met on Wednesday, March 4 for a workshop discussing the proposed sales tax dedicated to cover the high costs of repairing and replacing the city’s aged water and sewer infrastructure. The workshop was an initial step towards developing an ordinance to place the sales tax on the ballot for voters to decide come November.
Finance Director Michael Akins shared figures based on sales tax collected in 2025, showing what different percentages are estimated to bring if implemented. Akins projected that a .25 percent increase would generate $427,000 annually; .5 percent would generate $855,000; .75 percent to bring in $1.283 million, and a one percent increase generating an estimated $1.7 million. The current sales tax rate in Eureka Springs is 9.375 percent, so raising it by one percent (on retail) would make it 10.375.
Alderman Terry McClung suggested it would be advantageous to go ahead and raise by a full one percent due to rapidly rising costs. He used engineering fees as an example, “unfortunately you can’t do a project without them because the state and federal requirements are so stringent… I think we need to allocate a whole penny to stay ahead of the game.” He also pointed to the hope of removing the I&I [Infrastructure and Improvement] fee. Akins explained that the I&I fund was included as part of the water rate study – meaning that with the passing of the sales tax, the I&I fund could easily be removed.
Alderman David Avanzino expressed concern about how to share this information with the public and said he’s heard from constituents that their water bills have doubled. Aldermen concurred they have all received such feedback and discussed how they might address it. “I’m doing my best to explain but also I am very biased, because I know this has to happen,” Avanzino said.
Akins responded to Avanzino’s concerns over water bills being doubled. From rate increases that have already taken place, water rates should have only increased by about 20 percent. If an individual’s bill has doubled, or they sense a discrepancy, Akins asked that people reach out to his office or Public Works so they can figure out what the problem is. Large hotels and businesses with larger water meters will be more costly, as intended.
Akins composed a rate comparison analysis which compared average water bills prior to rate increases, and after. A bill for a household that uses approximately 1,000 gal. of water went up from an average of $62 to $68; a household using 1,500 gal., from $62-$69; 2,500 gal. from $77-$85; 3,400 gal. from $93-$109; 4,200 gal. from $126-$142; 7,500 gal. from $190-$247; 29,000 gal. from $860-$1000; 50,000 gal. from $9,000-$11,000.
Aldermen discussed how they would help the public understand why all this is happening, and the consequences of voting down the tax. Each voiced the importance of giving the public opportunities to share insight and concerns, and to be educated on the condition of our water and sewer systems and the financial burden set upon the community – one way or another.
Alderman Rachael Moyer pointed to the fundamental nature of water and public health through the handling of wastewater and protecting our environment with the systems that are going to do that. “These are basic municipal functions,” she said while expressing support for the one percent figure. According to McClelland Engineering, the firm that mapped out the plans for the wastewater and sewer plant, the useful life for the pieces of these systems are 20 years, while our plant’s parts and pieces are already 20 years old and beyond.
It was clarified that council has until August to adopt an ordinance calling for election, which must be filed with the county clerk by Sept. 1. Meetings and workshops posted on YouTube @cityofeurekasprings.
Questions to be answered next time include:
- How might the city be able to use the tax revenue to repay the $6 million bond or other water-related debts?
- What specifically will the money be used for?
- What is the projection for the next five to 20 years?
- What required changes might there be, associated with water and sewer infrastructure, when roundabout construction begins?