Bentonville City Council approves water agreement

BENTONVILLE -- The City Council on Tuesday approved an agreement with Cave Springs for the sale of water.

A water-rate analysis completed last year by Raftelis indicated a significant adjustment was needed to the wholesale rate for Cave Springs, Mike Bender, city public works director, wrote in a letter included in the council agenda packet.

The adjustment was based on the cost of service analysis. No rate adjustments other than the increases passed through from Beaver Water District have been implemented since a revised agreement between the two cities was done in 2011, according to Bender.

A rate analysis in 2015 indicated an increase was needed, but wasn't pursued. The new agreement will replace the one from 2011 and continue in six-year increments, Bender said.

Cave Springs' use rate is $1.60 per 1,000 gallons. The rate will jump to $2.16 per 1,000 gallons on July 1, $2.42 per 1,000 gallons Jan. 1, and $2.67 per 1,000 gallons Jan. 1, 2023. If a third-party study is done before 2023 showing a reduction in overall cost of service, the increase for that year will be reduced to reflect costs from the study, according to Bender's letter. Base monthly rates will remain the same during the same period.

Cave Springs Mayor Randall Noblett said the two cities have been in discussions about the new rates for the past several months. Cave Springs' City Council approved the contract at its May meeting, he said.

"Because the contract was 10 years old, costs had increased substantially without being passed on to Cave Springs," Noblett said. "As a result of a rate study, it was determined that a 61% increase in the wholesale water rate was appropriate. It was agreed that a three-tiered increase over 18 months was acceptable for both cities."

Cave Springs has restructured the cost elements in the water-rate system over the past couple of years, Noblett said.

"We have eliminated almost 60% of the water-system debt this year, and in 2019 we established capital-improvement funding outside of residential customer water rates," Noblett said. "Because of the recent debt reduction and cost restructuring, the water rates will not be impacted at all by the wholesale rate increase."

The agreement previously was approved by the Bentonville Utility Board.

The council also approved an ordinance related to downtown parklets. The Planning Commission gave its OK to the item last week.

The ordinance will codify and establish a process for the long-term use of public on-street parking spaces adjacent to downtown business establishments, according to council documents.

The City Council adopted an ordinance July 14 allowing placement of tables, chairs and other items on city public on-street parking spaces adjacent to downtown businesses temporarily through Jan 1, according to planning documents. The spaces are often referred to as parklets, according to planning documents.

Many establishments didn't have the outdoor space or designated parking areas to provide outdoor dining or curbside pickup during covid-19 restrictions, according to planning documents.

The ordinance adopted a process to request to enter into an encroachment agreement with the city. Five such agreements are in place, according to planning documents.

The City Council extended the expiration date twice -- to April 30 and then to Aug. 31. The City Council requested planning staff prepare an ordinance allowing the spaces to become permanent with an annual renewal process, according to planning documents.

New guidelines will include an application fee and an annual encroachment fee. The encroachment would be for one year.