Maumelle residents will be receiving mailers by week's end detailing the changeover for water and sewer services from Maumelle Water Management to Central Arkansas Water and North Little Rock Wastewater, beginning Tuesday.
Monthly water bills for previous Maumelle Water Management customers will now come from Central Arkansas Water under the name Utility Billing Services. Wastewater charges also appear on the water bill.
Under the change, Maumelle customers will face a higher bill, starting with a nearly $20 per month increase because of surcharges for water. That could last for a 24- to 30-month period. Customers will also see a wastewater surcharge at some point.
An eight-page brochure from Central Arkansas Water mailed Tuesday afternoon to Maumelle Water Management's 10,500 metered customers includes a sample of the new bills, payment options and utility phone numbers. About 7,400 of Maumelle's customers are residential.
Under the consolidation plan achieved in the fall, Central Arkansas Water will operate and manage water service for Maumelle, although current Maumelle Water Management's rates will stay in effect during an approximate two-year consolidation period. Sewer rates, though, will change immediately to rates charged North Little Rock Wastewater's 32,000 customers.
During the next 24-30 months, a transmission pipeline will be constructed before Maumelle can start receiving water from Lake Maumelle and Lake Winona, the water sources for Central Arkansas Water's 125,000 customers who are mainly in Little Rock and North Little Rock. Until then, the Maumelle water source will continue to come from a series of wells drawing from an aquifer near the Arkansas River.
The cost of a 30-year bond issue to pay for taking over the utility's operations, debt and the pipeline's construction will fall on Maumelle's customers through a surcharge to start at $24.85 monthly on Maumelle customers' water bills during the transition period. After two years, the surcharge will be reduced in two stages to pay for the refinancing of Maumelle Water Management's existing debt and finish paying the bond debt.
The surcharge is about $5 higher per month than what was estimated during consolidation negotiations late last year, mainly because of the number of Maumelle employees moving over to CAW and a higher construction cost of the transmission line than first projected, said Central Arkansas Water CEO Tad Bohannon.
The surcharge is "a combination of the short-term, midterm and long-term surcharges," Bohannon said. "If there are any construction savings once we get to bid, the savings will be passed on to the Maumelle customers.
A monthly $1.50 Watershed Protection fee charged to Central Arkansas Water customers will also be new to Maumelle customers, but it will replace a 75-cent Water Source Protection and Development fee and an $8.25 debt service fee that the Maumelle utility charged.
North Little Rock Wastewater is purchasing the Maumelle wastewater system at a cost of about $2.5 million, equal to the debt associated with the wastewater portion of Maumelle Water Management.
A wastewater surcharge won't be levied at first for the removal of "sludge" from lagoons inside Maumelle, but North Little Rock Wastewater will add that charge to its Maumelle customers' bills once that work is completed, said Marc Wilkins, executive director of the North Little Rock utility.
"There will be a surcharge, but it will not be on the initial bills," Wilkins said, adding that there is no "definitive date" for that charge to begin. "It will be based on when we actually remove the solids. Then we will implement that charge to reimburse the actual cost."
Maumelle Water Management will cease to exist with the changes. A special meeting of its Board of Commissioners is scheduled today to complete final consolidation resolutions. Of Maumelle Water Management's 30 employees, 28 will go to work for Central Arkansas Water and two will join the North Little Rock Wastewater Department, said Barry Heller, the Maumelle utility's general manager. Heller is among those to switch to Central Arkansas Water.
A billing office at 90 Lake Pointe Place in Maumelle will remain open for the time being for the convenience of Maumelle customers, Bohannon said.
"What we're thinking is it will stay open through at least this year," he said.
Talks of Central Arkansas Water's offer to consolidate with Maumelle Water Management began last summer after the Maumelle utility's commissioners recommended a three-year rate increase of about 40 percent in water and sewer services, citing much higher operating expenses than revenue. The rate increase was later lowered to 9 percent, plus a 15 percent increase in the debt service fee, while Central Arkansas Water's proposal was under negotiation and after customer backlash to the increase. The revised rates began Sept. 1.
Maumelle Water Management was also $8 million in debt and had fallen out of compliance with one of its bond covenants.
"Since the consolidation was announced, it's been like we dropped off the face of the earth," Heller said, citing frequent complaints from customers about the city's water quality and rates. "Those [complaints] have gone quiet. We've had very few questions on this [consolidation] from customers who have come by. We expect to hear a lot when that brochure hits."
Metro on 02/25/2016