HOT SPRINGS -- The water rate increase the Hot Springs Board of Directors adopted last month to cover cost overruns on the Lake Ouachita water supply project influenced lump sum bonuses the board gave the city manager and city attorney, Mayor Pat McCabe said.
The board concluded its 2021-22 term Tuesday with its annual performance reviews of City Manager Bill Burrough and City Attorney Brian Albright, giving the city's CEO and chief legal counsel $3,800 end-of-year bonuses.
The extra compensation represented 2.1% of Burrough's $181,646 base salary, the city's human resources department said. Albright's bonus was 2.4% of his $157,435 base salary.
Burrough and Albright received 10% bonuses last year and 25% and 20% in 2020. They are the only city employees whom the board has direct authority over. Per their employment agreements, their annual performance evaluations are conducted in December.
The bonuses were announced after the board returned from an almost three-hour-long executive session in the board conference room.
The board approved a $1,200 end-of-year bonus for full-time city workers and a $600 bonus for part-time workers earlier this year.
"The city board of directors and city leadership are extremely sensitive to the economic environment that Hot Springs and all communities across the country are facing," McCabe said in the written statement he provided The Sentinel-Record.
"Communities across the country are dealing with increased costs of everything and major capital projects are not immune to these increased costs.
"Given the current economic environment and the need to increase the monthly water rates in 2023, the board of directors felt a more measured bonus should be awarded. The city board of directors look forward to Mr. Burrough and Mr. Albright serving in their respective capacities for many years to come."
Base rates for residential customers inside the city will increase $2 a month in January and another $2 in November. Volumetric rates, or what the city charges for usage in excess of 1,000 gallons a month, will increase 3% a year.
The rate structure that took effect in 2018 raised the minimum charge for residential customers inside the city $8.39 a month over five years. Residential customers outside the city saw their base rates increase $12.39 over that time. They will see an additional $6 increase by November.
The first round of increases services the $109 million debt issue the board authorized in June 2020 to finance the supply project. In July of this year, the city realized the bond proceeds wouldn't cover the cost of the project, as the low bid for the water treatment plant the city is building off Amity Road was $14 million more than what was estimated.
Around that time the city learned Entergy Arkansas wouldn't allow it to float and sink its raw waterline across Mazarn Creek. The 17-mile line will connect the intake above Blakely Mountain Dam to the new treatment plant. The city will have to bore the line under the creek bed.
The city said the unexpected cost added $10 million to the project. It's one of several project components that have exceeded estimates, ballooning what was a $106 million project two years ago to $151 million based on current estimates.
WASTEWATER
McCabe said Burrough advanced other priorities the board established for 2022, including securing funding to move the wastewater system closer to compliance with the Clean Water Act. The $46.25 million bond issue the board authorized in June will address sewer system overflows that have released more than 5 million gallons of untreated wastewater into the Lake Catherine watershed since the start of the year.
The debt is secured by the new rate structure that took effect in January. It raised the monthly debt service charge on utility bills from $17.73 to $19.73 for residential customers inside the city. It will increase to $24.48 in January 2024, with 3% annual increases assessed in subsequent years.
The debt service charge for residents outside the city increased to $27.39 in January. It will rise to $34.05 in January 2024, with annual 3% increases assessed in subsequent years. Burrough told the board while other wastewater systems under similar state directives to comply with the Clean Water Act are fighting the mandates in court, the city will be protected from further civil penalties while it makes improvements to its system.
New and amended consent administrative orders it entered into with the state Division of Environmental Quality in January give the city until 2030 to come into compliance.
The city was awarded a $5 million grant earlier this month for improvements to the Davidson Drive wastewater treatment plant. The money came from $270 million in American Rescue Plan Act funding the Arkansas Natural Resources Commission awarded for water and wastewater projects.
The Davidson Drive improvements include a second outfall on upper Lake Catherine. The city has a permit to discharge effluent into the lake.
OTHER PRIORITIES
McCabe credited Burrough for using part of the city's $11.37 million American Rescue Plan Act allocation to complete the upgrade of all of the Police Department's body-worn cameras and in-car video systems. Funding the upgrade through the department's operational budget would have taken five to seven years, Police Chief Chris Chapmond told the board in March.
Burrough also took the lead on the For Our Roads Now advocacy campaign, helping get the reauthorization of the 0.625% countywide sales tax passed in the Feb. 8 special election.
The ballot title voters endorsed dedicated the funds to repairing and replacing city and county-maintained roads and bridges. The city is expecting $6 million from its per capita share next year. Per the ballot title, the tax will sunset on June 30, 2027.
The city's 2023 budget appropriated $4.6 million for paving, including $2 million of new revenue from the tax and $2 million from when the tax was servicing the $54.7 million bond issue floated for road improvements in late 2016.
McCabe said extending the Hot Springs Creek Greenway Trail, building out the city's solar project and overseeing regulations the board adopted last year for short-term residential rental businesses were other initiatives Burrough advanced this year.
"These are but a few of the many projects addressed in 2022 while maintaining the day-to-day services our community needs," he said. "Many of our projects are multiyear efforts, so as one is completed there are other projects that can then begin. Not sure if there is another community in Arkansas that can compare with what we are addressing under the leadership and direction of Mr. Burrough."
ALBRIGHT
McCabe said Albright provided legal counsel to the board while his office prosecuted 25,000 cases this year in District 41 State Court.
"Beyond that activity, he reviews all contracts in which the city enters, and given the list of major projects that is no small task," McCabe said. "He ensures proper safeguards are in place. He provides the necessary counsel to the city board but stops short of advising us what to do. He is well-respected amongst his peers."
According to Burrough and Albright's employment agreements, they also receive $300 in vehicle allowances per pay period. Burrough gets a $ 100-a-month cellphone allowance, and Albright gets $70 a month.