The Sherwood City Council will consider Monday whether to raise the city's sewer rate by $1.60 per month on the average residential bill, to take effect Jan. 1.
The proposed 8.5 percent increase would raise the average residential monthly bill from $18.75 to $20.35 next year, with another possible increase of up to 17.5 percent to be considered at a later date.
Sherwood Wastewater utility ratepayers number about 4,500 residential customers and about 300 commercial customers. A portion of the city is served by neighboring North Little Rock Wastewater.
The proposal is submitted as an ordinance that requires three readings before a council vote, but the council can suspend the rules to have all three readings at Monday's 7 p.m. meeting.
"I would anticipate it going ahead and voting," Mayor Virginia Hillman said of the council. "[The increase] is what it costs to maintain the system."
Sherwood's last sewer rate increase was in 2010, said Dennis Benson, the utility's manager.
"The main point for this is the revenue coming in has remained static in the last four years while we've had inflationary pressures," Benson said. "The consumer price index has increased 8.5 percent, so we're really proposing to be able to stay up with that and to not get too far behind."
The proposed sewer rate increase comes just three weeks after Sherwood voters approved adding a 1.3-mill property tax to support the issuance of up to $6 million in bonds for the construction of a new public library. The new library will replace the 25-year-old Amy Sanders Library, 31 Shelby Road. The millage means owners of a $150,000 home would pay an additional $39 on the home's annual property tax bill.
Hillman said the sewer rate increase is for the city to afford "the cost of maintaining the sewer system."
"There are so many environmental restrictions and requirements we must continue to meet just to keep it going," she said. "It's very expensive."
Sherwood's rates are lower than in Pulaski County neighbors Little Rock, North Little Rock and Jacksonville, based on a survey by Sherwood's utility staff, according to documents provided to the City Council. More than half of Sherwood's households, the documents said, pay $18 or less monthly for wastewater service. Residential customers make up about 95 percent of all of the utility's customers.
The first phase of the proposed increase would address operational expenses, according to a summary provided in the council's agenda packet. This will include hiring an additional employee for routine line cleaning crews. Sewer line cleaning requires a minimum of three crew members, but additional personnel is needed if traffic control is necessary, according to the summary sheet provided to the council. The utility could then target drainage basins for routine cleanings and minimize overtime related to emergency calls.
"Without the proper staffing it's hard to do routine line cleaning with any kind of consistency without having another person," Benson said.
The second phase of the proposed increase could be up to 17.5 percent, but the exact increase won't be known until next year when the cost of a loan to fund the capital improvements is determined, Benson said.
The second phase would be to possibly obtain $4 million funding for a loan to close the utility's South Treatment Plant, 2000 Stafford Road, according to the council documents. That rate increase would be used to pay off the debt service for the loan. All treatment would then be moved to the city's North Plant, 19 Algonkin Place.
"The second one would come after we have determined the engineering and construction costs to close the South Plant and bring all of the wastewater to the North Plant," Benson said "We will go back to the council [for the second phase] once we have a better idea about what exactly we need to borrow and what the cost is at that time."
Metro on 11/23/2014