HOT SPRINGS -- A bill preventing municipal water systems from charging customers beyond the city limits higher rates than those paid by municipal ratepayers has been withdrawn.
The sponsor, state Rep. Laurie Rushing, R-Hot Springs, said she pulled House Bill 1700 as part of an agreement with the Arkansas Municipal League, the advocacy group for the state's cities and towns.
She said the concession was conditioned on the Municipal League working to help bridge the city-county divide caused by disagreements over Hot Springs' policy of restricting water access in unincorporated areas of Garland County.
"The Municipal League is good at helping to resolve issues," said Rushing, who represents southeast Garland County constituents, most of whom reside outside the city limits. "To honor my end of the deal, I removed it, for at least this session."
Don Zimmerman, the organization's executive director, said it opposed the bill.
"Laurie had said to one of our staff guys that she might be trying to convene a meeting to see if we couldn't help some," Zimmerman said. "We'd certainly [been] willing to help anyway we can. We didn't think [HB]1700 was the answer."
The Hot Springs water utility charges a 50 percent premium for customers outside the city, a rate Rushing said seemed high in relation to other municipal systems' rural rates.
"Talking to other cities and rural areas, the rates county people in Hot Springs pay is higher than the average rate across most cities and counties in the state," she said. "I've not seen any numbers. That's just what I've been told."
The rate structure for Central Arkansas Water -- which serves the area including Little Rock and North Little Rock -- charges retail residential customers outside the two cities a 60 percent premium, spokesman John Tynan said.
He said the extra cost owes to customer service expenses associated with serving those areas. Hot Springs officials have cited a similar rationale for higher rates outside the city limits, where more than half its customers reside.
"There's more driving, more travel time and larger spaces between meters," Tynan said. "So the cost of service does increase. That's our justification for why we have the rate differential."
The Malvern Water Works charges its 47 retail customers outside the city limits twice what municipal customers pay, Manager David Coston said.
The Kimzey Regional Water System, serving parts of four counties -- including Garland County areas west of Hot Springs -- charges a single residential rate, as none of its 4,500 retail meters are in incorporated areas, General Manager Keith Daniell said.
All of the approximately 13,000 meters served by the Benton Water Utility are in the city limits, said General Manager Terry McKinney.
The bill also would've required approval from the Arkansas Public Service Commission for city water systems to expand into areas adjoining municipal boundaries, creating the same expansion standard that governs city-owned electrical utilities. It would've kept the authority to set rates with cities or utility commissions established by municipal governments.
Senate Bill 762 sponsored by state Sen. Alan Clark, R-Lonsdale, was held up in a House committee for a second time Wednesday after being approved by the state Senate two weeks ago. It called for water providers to satisfy service requests for all property within the service territory set for them by the Arkansas Natural Resources Commission, provided adequate infrastructure is in place or if the customer is willing to install it at his expense.
The bill was filed in response to a city policy that county officials have said conditions water access on annexation and limits economic development in unincorporated areas.
It was opposed by officials representing water utilities in Northwest Arkansas, Jacksonville and Hot Springs. Clark said Wednesday that the bill isn't likely to become law before the legislative session ends.
Rushing, the bill's House sponsor, said the circumstances framing the disagreement seem peculiar to the area.
"Most cities and counties don't have these issues. It's such a contentious, localized problem we have here," she said. "Everybody else around the state seems to be able to work out their differences."
State Desk on 03/28/2015