LITTLE ROCK — The Central Arkansas Water utility board approved a rate increase for residential water bills of a little less than 4 percent for 2013 and an additional 4 percent increase in 2014.
The increase for commercial users will be about 3.5 percent each year, but that amount will depend on the type of business and amount of water used.
The rates will affect about 400,000 customers in the utility’s coverage area in central Arkansas, including all of Little Rock and North Little Rock.
The utility said it needed to raise rates to pay off capital improvement debt, much of which was racked up last year when the agency started to renovate its treatment plants to comply with new Environmental Protection Agency rules on disinfectants and disinfectant byproducts.
The utility borrowed about $18 million in bonds last year to make those upgrades and other safety improvements.
A public hearing will be scheduled. Officials in Little Rock and North Little Rock will have 90 days to submit their comments.
The increase takes effect March 1.
The increase comes in the same year of substantial sewer-rate raises in Little Rock and North Little Rock, a recycling-fee increase in North Little Rock, and two voterapproved millage extensions — one for street and drainage projects and one for library projects in Little Rock.
The rate for the minimum usage of 200 cubic feet of water or less for customers who live in Little Rock or North Little Rock would increase from $5.35 a month to $5.60 in 2013 and $5.85 in 2014.
For customers who live outside North Little Rock and Little Rock, that rate would rise from $7 to $7.33 in 2013 and $7.66 in 2014.
“Even with this increase, we still have the second-lowest rates in the area behind Memphis [for large cities],” Gary Pittman, the chief financial officer for Central Arkansas Water, said Thursday.
The average Central Arkansas Water residential customer pays $12.15 a month currently, officials said. Those ratepayers will see a jump of 47 cents to $12.62 starting in March, and another 48-cent jump in January 2014 to $13.10 a month.
The average Memphis residential water customer pays about $8.40 a month, according to the city’s utility. Nashville, Tenn., St. Louis and Springfield, Mo., water customers all pay higher monthly average residential rates than Little Rock.
Typical Central Arkansas Water commercial users — excluding hospitals, bottling plants and other largevolume operations — would pay an average of $2.48 more a month under the two rate increases. And customers with sprinkler meters would pay an average of $1.65 more a month on those accounts during the six most active months of sprinkler use, but Pittman said averaged over the year that amount would be about 82 cents a month.
The board did not have much discussion over the rate increase Thursday, but several board members stressed at previous meetings that the increase would not be necessary if the new federal regulations were not going into effect.
Graham Rich, the utility’s chief executive officer, said the last water utility rate increase was approved in 2010 for that year and for 2011 to equalize customers in Little Rock and North Little Rock, who had been on different rate schedules since the two cities’ water utilities merged in 2001.
The board also approved the utility’s annual budget for 2013 at the meeting Thursday.
Pittman said the utility’s budget will increase from about $51.8 million to about $53.3 million, which is about 3.3 percent more than the 2012 budget because of the rate increase and because of an increase in usage.
He said the utility’s operating expenses will only increase about 1 percent from the 2012 budget because most of the rate increase funds will be used for debt and not for operating income.
Front Section, Pages 1 on 11/09/2012