Conservation and neighborhood groups representing Central Arkansas Water ratepayers asked the utility's Board of Commissioners on Thursday to consider a 15-cent increase in a monthly watershed protection fee to give the utility more flexibility to preserve the water quality at Lake Maumelle.
The utility's residential customers pay a monthly fee of 45 cents for conservation efforts around the lake, which is the primary drinking water source for about 400,000 central Arkansas residents.
With no resolution before the commissioners on the issue, no action was taken. Commissioners did ask Chief Executive Officer Graham Rich to meet with the representatives by next month's board meeting to consider the possibility and to determine whether an increase to 60 cents monthly for residential customers would be a proper amount to meet future needs.
"I'd rather think of this as part of a rate increase package," Chairman Roby Robertson said of the fee proposal.
Central Arkansas Water's staff is scheduled to present a rate study by year's end on possible water rate increases for 2017-2019. A 2016 budget and a capital improvement plan are to be considered at next month's meeting.
Barry Haas, conservation chairman for the Audubon Society of Central Arkansas, presented the proposal for raising the watershed fee on behalf of his group, the Coalition of Greater Little Rock Neighborhoods and the Sierra Club-Central Arkansas Group.
"Ratepayers have a stake in their water quality," Haas told commissioners. "We'd like to add a little more money to give you more flexibility to do the things you have to do to protect the water quality.
"An increase of 15 cents a month, or $1.80 a year, is not a burden for anyone, but will greatly increase this board's ability to better protect our drinking water quality," he said of the proposed increase for residential customers.
In a letter to Rich, Haas also proposed proportionally increasing the watershed protection fee for larger meter sizes.
The watershed protection fee produces about $1 million annually for the utility. The increase, Haas estimated, would produce another $300,000 per year. The fund has accumulated a fund balance of about $2 million, utility Chief Financial Officer Jeff Mascagni said.
The utility uses the fund to buy properties in the watershed to help protect the lake.
"The purchase of land is the best way to protect our watershed," Rich said.
Reading from a prepared statement, Haas said the purchase of "several large tracts of land" and a "significant conservation easement" have resulted in a majority of the fee revenue to be "obligated for debt service over a number of future years to pay for those past acquisitions."
About $700,000 of the $1 million in fee income annually is spent for debt service, Mascagni said.
The watershed protection fee estimate, Haas said, doesn't include the expected addition of about 10,500 customers from Maumelle Water Management in Maumelle that is proposed to be consolidated with Central Arkansas Water by early next year.
Commissioners approved Thursday separate resolutions to set rates for Maumelle customers if consolidation occurs by March 1 as proposed and to provide a required 90-day notice of a bond issuance and any rate structure changes to the Little Rock Board of Directors and the North Little Rock City Council. If both governing bodies vote against any water rate changes, those changes cannot occur.
Establishing a Maumelle rate structure now was necessary to start the 90-day notification process and prevent delays from issuing bonds in January needed for the consolidation, utility Chief Legal Counsel Tad Bohannon told commissioners.
Under the proposed consolidation, Central Arkansas Water would continue to charge Maumelle Water Management's current rates during a two-year transition period for a transmission pipeline to be built. Customers in the city would continue to receive Maumelle Water Management's well water during that time.
Maumelle customers would pay a watershed protection fee of 75 cents per month, which replaces their current monthly Maumelle water source development and protection fee of the same amount. When the transition period ends, all Central Arkansas Water customers would pay the same fee.
Under the consolidation, Maumelle customers also would pay a surcharge on their monthly water bills to cover Central Arkansas Water's costs for operating the city's water system for two years. Lesser surcharges would take effect in two stages starting in 2018 to pay for refinancing of Maumelle Water Management's existing debt and to pay off the new bond issue debt.
Metro on 10/09/2015