Little Rock sewer customers' bills will increase annually starting next year through 2021 after the city Board of Directors approved the latest round of rate increases Tuesday.
In an 8-0 vote, with two city directors absent, the board authorized Little Rock Wastewater to raise sewer rates 4.75 percent each year from 2017-2021. That will be in addition to the increase already set to take effect in January, which utility officials now estimate to be about 4.35 percent.
In addition to the charge increasing by those amounts each year, the franchise fee levied on the rate by the city will rise respectively. The levy is 10 percent of whatever monthly rate is charged.
For a customer who pays $40 a month for sewer services now, the rate will increase to $52.65 by 2021, or nearly $152 a year. The $4 franchise fee in that instance will rise to $5.27 monthly.
Little Rock Wastewater says the average monthly sewer bill is $31.71 now, paired with a $3.17 franchise fee.
Resident Daniel Hopwood pleaded with the board before the vote not to approve the rate increases, citing a previous schedule of increases approved in 2012. After those increases were approved, former Wastewater Chief Executive Officer Reggie Corbitt used some of the revenue to give bonuses to employees, prompting several city directors to reprimand the utility.
"Government spending is like a fire. No matter how much fuel you feed a fire, it never gets enough. It wants more. No matter how much money we give Wastewater, they will also demand more. I believe it's time to bring spending and pay scales in line with reality," Hopwood told the board.
Corbitt was fired in January after a police investigation revealed what the Police Department called "questionable business practices." The prosecuting attorney's office chose not to file charges against Corbitt. Greg Ramon took over as the new CEO in October and re-evaluated plans made under Corbitt.
City Director Doris Wright of Ward 6 said she feels the same way as Hopwood but that she trusts that the utility is under better leadership now, and realizes the revenue from rate increases is needed to correct sewer overflows.
"I believe what I have been told. I believe the figures I have seen. And my expectations are, I'm not going to read in the newspaper after this passes that big bonuses were given after this increase. Those are my expectations," Wright told Ramon at Tuesday's meeting.
"You have my commitment," Ramon told her.
Wastewater officials reported that the 2017-2021 increases will raise $212.9 million for projects mandated in a court-ordered agreement in a 2000 lawsuit by the Sierra Club of Arkansas and a consent decree placed on the sewer utility by the Arkansas Department of Environmental Quality.
The previous plan to meet the settlement agreement and consent order under Corbitt's leadership relied heavily on building additional storage to handle storm water that overwhelms the sewer system during heavy rainfall.
Ramon had a team review that plan when he was hired in October and has since recommended a different approach.
Ramon's plan centers mostly on repairing pipes, inspecting the system's infrastructure and spending money to replace both public and private sewer mains. Part of the proposal includes having contractors fix the part of a private homeowner's sewer pipe that extends onto public property to connect to the public pipe if crews are already working in the area and the privately owned pipe is deteriorating.
In such a circumstance, the utility would then send a letter to the homeowner describing the condition of the sewer main and referring the owner to the program that offers residents up to $2,500 to have private pipes replaced.
Resident Scott Gordon spoke in support of the new plan Tuesday, urging the board's approval.
"We're going to have to spend money in order to fix sewer mains, that's a given. I think the way in which Mr. Ramon and his team is now moving is the best way for us to do that," Gordon said.
Ward 4 City Director Brad Cazort agreed, saying he appreciates Ramon's "forward thinking" and calling the new plan "fair and equitable."
The revenue from rate increases will help Little Rock Wastewater expand the private replacement program to double the number of reimbursements each year. Customers pay a $1 fee on monthly bills toward the program and must apply to participate. There are 127 people on the waiting list, and Ramon hopes that by expanding the program with bond revenue, he can get that number down.
The majority of the money raised from rate increases will go toward fixing and inspecting pipes and the program expansion, but Ramon also plans to spend an estimated $58 million to upgrade water-treatment plants. Additional infrastructure is needed to meet anticipated requirements restricting the amounts of certain chemicals allowed in treated wastewater. State and federal agencies issue such limits and Ramon expects there to be a new mandate on ammonia forthcoming.
"I'm here to do the best thing for the citizens. I believe we've done everything we can to keep rates as low as possible. I want to say, it's a very expansive, very expensive system. It's no different than your car or house," it has to be maintained and upgraded, Ramon told the board during his presentation last week.
Metro on 08/05/2015