Little Rock Wastewater is asking for a series of sewer rate increases that would last through 2021, in addition to the one already scheduled to take effect next year.
The new increase schedule would pay for system upgrades needed to mitigate citywide sewer overflows. The Little Rock Board of Directors would have to authorize the increases for them to go into effect.
The board previously approved a 4.75 percent increase that will start in 2016, but Little Rock Wastewater officials said Wednesday that because of demographic changes since that was approved, the increase is likely to only be a 4.35 percent rise.
In addition to the 2016 jump, the Little Rock Water Reclamation Commission, which oversees the utility's finances and operations, recommended Wednesday that the city board authorize 4.75 percent increases every year from 2017 through 2021.
The bill for a ratepayer currently paying $40 a month for sewer services would increase to $52.65 by 2021 under the proposal.
The utility said Wednesday that the current average monthly sewer bill is $31.71.
The proposed rate increases would fund $212.9 million in projects to meet a court-ordered consent administrative order, implement regulatory changes to treatment plants and inspect the sewer system's large interceptor lines.
The approach is different from what was previously proposed under the former chief executive officer, Reggie Corbitt. When Corbitt was fired in 2014, the utility's governing body -- then called the Little Rock Sanitary Sewer Committee -- took another look at the rate-increase schedule Corbitt had announced in 2013.
Under Corbitt's recommendation, rates would have increased from now through 2019 at a slightly larger percentage. His plan to correct overflows largely relied on building additional storage to handle the increased water that entered the sewer system during large rainfalls.
But new CEO Greg Ramon, who was hired in October, called that a "bucket" approach. Instead, his proposal calls for fixing the pipe infrastructure that is allowing the water to get into the system.
"If you want to fix the roof, you can either put a bucket underneath your house to catch the leak, or you can fix the roof," Ramon said. "We want to get to the point of actually fixing the pipes, not capturing the water. The goal is to try to reduce inflow and infiltration."
The wastewater utility is down to 53 sites across the city that are known to overflow during heavy storms, which is a decrease from the more than 300 sites when mitigation began in 2001. That's when the Sierra Club settled a lawsuit against the utility over the numerous overflows, which the group called a health risk to people and the environment.
That settlement resulted in a consent administrative order from the court and the Arkansas Department of Environmental Quality.
In 2012, it was estimated that it would cost Little Rock Wastewater $168 million to meet the consent order. Under Ramon's leadership, the utility successfully lobbied for a five-year extension to the deadline for meeting the requirements, and it is now estimated to cost $145 million to do so. The order requires compliance by 2023.
Much of the plan for compliance is now focused on renewing existing pipe infrastructure, including putting money into customers' privately owned home sewer lines.
Ramon is proposing to expand the current home service-line replacement program that allows residents who wish to replace their private lines that connect to the public main to recoup up to $2,500 of that cost from the utility. Currently, ratepayers are charged a $1 fee on their monthly bills to pay for that program.
The program has assisted with 819 replacements since it began in 2013, but 127 applications are on the waiting list because available funds run out quickly. There have been 230 applications withdrawn, some of them presumably because of the long wait.
Ramon wants to take out bonds to expand the program and double the available funds, increasing the 270 replacements accomplished each year to 540 per year.
In addition to that, anytime the utility is working on a pipe, it will replace the private line that is connecting to the public main up to the homeowner's property line. It will then send a letter to that property owner to tell him the condition of his pipe running inward from the property line and inform him that he can be reimbursed up to $2,500 if he chooses to replace it.
Ramon proposed spending $9 million on a condition assessment of and upgrades to the utility's large interceptor lines, about 60 percent of which he said are more than 30 years old. The expected life capacity of those pipes is 50 years.
He wants to address any problems before the pipes collapse, which could have "widespread environmental and economic impacts," he said, pointing out that such pipes surround the airport, run through the River Market District and are located in other heavily populated areas.
About $58.9 million needs to be spent to update treatment plants to meet coming regulatory changes regarding the amount of ammonia, phosphorus and nitrogen allowed in treated water, Ramon said. Permits for the treatment plants renew every five years to allow environmental agencies to implement new limits. Little Rock Wastewater has permit renewals coming up in 2017 and 2020.
By taking advantage of revolving loan funds, the utility could take out bonds in 2016 even though the proposed new rate increases wouldn't start until 2017. That would allow construction to begin next year if the Little Rock board moves quickly to approve the rate increases this year.
The Water Reclamation Commission was unanimous in its vote Wednesday to send the city board the request for the rate increases.
Vice Mayor and Ward 5 City Director Lance Hines, who serves as a liaison to the sewer commission, said he's supportive of the new approach to the consent decree with the focus on rehabilitating large pipes.
"One of these pipes rupturing could be worse than a whole year of stormwater overflow," Hines said.
Ramon added that a rupture of one of the large pipes would spill 100 percent wastewater, whereas overflows at manholes during storms are mostly stormwater. A collapse of a larger line would be a great environmental concern, Ramon said.
Metro on 07/16/2015