LITTLE ROCK — The Little Rock Wastewater Utility, in a race to approve a rate increase by the end of the year to meet the terms of a lawsuit, will propose rate increases next year of about 8 percent for residential customers and about 30 percent for commercial customers, the agency’s chief executive officer said Wednesday.
Reggie Corbitt told the Little Rock Sanitary Sewer Committee, the board that governs the semiautonomous utility, that he wants to take a rate increase proposal to the city Board of Directors at its Oct. 11 meeting. The Board of Directors has the final say over the sewer committee’s recommendations.
The utility’s $25 million budget for 2011 originally projected that a 20 percent rate increase would be needed in 2012, with increases of 10 percent in 2013, 5 percent in 2014 and 5 percent in 2015.
The budget painted a dire picture for the utility, saying the Little Rock Wastewater Utility “will become insolvent by midyear 2012 without one of the following: a rate increase, decrease in [operations and maintenance] expenses or reduction in funding capital costs out of sewer revenues.”
Currently, residential sewer bills are based on the amount of water usage as recorded by Central Arkansas Water. In addition to a percubic-foot-of-water charge for sewer use, businesses are assessed a fee based on what it costs the utility to treat their specialized waste.
Both residential and com- mercial users currently pay $3.09 per 100 cubic feet of water used for sewer service. Under the current proposal, which has incremental increases built in through 2018, that rate would rise to $5.13 per 100 cubic feet for residential customers and to $6.25 for commercial users by 2018.
The utility has about 60,000 residential customers and about 6,000 commercial customers.
Corbitt said the utility should know by Oct. 10 whether the courts have granted a three-year extension for meeting the terms of a 2001 Sierra Club lawsuit regarding sewer overflows.
The settlement agreement calls for the sewer improvements to be completed by 2015. The state Department of Environmental Quality has said it has no objection to extending the deadline as long as the court agrees to it. Through 2010, the utility has spent $262,834,100 on the projects.
“Because of the reduction in our revenues, there is an increased need to stay on schedule with the consent administrative order,” Corbitt said. “It’s imperative that we get back to work.”
The committee will also ask the Board of Directors to consider an assistance program for sewer-line replacements.
The program would add a $1 fee to monthly wastewater bills. The revenue would allow up to 480 customers a year to be reimbursed up to $1,500 each for repairing the lines that connect their homes to the sewer system, which can cost as much as $2,000 to $3,000 or more if serious problems arise.
Chief Engineer Howell Anderson told the committee that an estimated 66 percent of the lines that connect homes to the sewer system in the city are more than 20 years old and that nearly 10 percent of those would fail leak tests.
Anderson noted that eventually a home is going to need to have its sewer line replaced and that the program would be an incentive to urge homeowners to do so when the time comes rather than allow lines to either leak into the surrounding soil or to allow rainwater to infiltrate the sewer system and cause future overflows.
Anderson presented other options that would yield fees ranging from $1.35 to $2 per month that would cover repairs ranging from $2,000 to $3,000.
Another proposal the committee has to take before the Board of Directors would charge a flat $274 one-time fee for new homes and businesses to connect to the city sewer system. The fee idea was brought up in 2008 by a rate advisory committee but has not been popular.
The committee plans to call a special meeting Oct. 4 or 5 to take a vote after studying the proposals again. The proposed ordinances were put off while city leaders campaigned for a sales-tax increase, which was approved by voters Sept. 13.
If the measures are to take effect in January, there are still several steps that must be taken, said Carolyn Witherspoon, the utility’s attorney.
“There’s a requirement for a public hearing to be held before there’s a rate increase,” she said. “You have to give enough notice for that public hearing to take place. The ordinance has to be read three times, and then after it’s voted on, there’s an option for citizens to petition for reversal.”
Front Section, Pages 1 on 09/22/2011