Clearing the water: Council agrees to hold public meeting on water, sewer rates

Wednesday, March 15, 2017

The Eureka Springs City Council will hold a public meeting later this month to allow citizens to give input on the proposed water and sewer rate increases.

The council voted Feb. 28 to have a public hearing on Wednesday, March 29, at The Auditorium, but Mayor Butch Berry said Monday that isn’t proper protocol. Berry said state law requires the council to present a plan for the proposed water and sewer rate increases at a public hearing, rather than offering all the options.

“We can’t establish a public hearing before deciding what we want to do with the rates,” Berry said.

He discussed two proposed changes to the water and sewer rates, saying the city needs water and sewer rates to generate at least $387,301 each year to continue making bond payments. The two options, he said, are increasing water and sewer rates 30 percent across the board or establishing a bond service fee. He said the bond service fee would depend on how much water a consumer uses.

According to a handout, there were 1,885 water and sewer accounts in 2016, with 792 accounts in Tier 1 (42 percent), 848 accounts in Tier 2 (45 percent) and 246 accounts in Tier 3 (13 percent). The numbers for each tier actually total 1,886, one more than the 1,885 listed on the handout.

Tier 1 includes those who use less than 2,000 gallons of water a month, Tier 2 includes those who use between 2,000 and 8,000 gallons and Tier 3 includes those who use 8,000 gallons and up.

The handout details how the proposed changes would affect the average water bill of a consumer in each tier. The average monthly bill of a consumer in Tier 1 is $20.70; that would increase to $26.91 with the proposed 30 percent across-the-board increase, the hand-out says. That is an increase of $6.21 per month. The proposed bond service fee would be $5 for Tier 1, the handout says, making the average bill of a Tier 1 consumer $25.70.

The average monthly bill of a consumer in Tier 2 is $51.31; that would increase to $66.71 with the proposed 30 percent across-the-board increase, the handout says. That is an increase of $15.39 per month. The proposed bond service fee would be $20 for Tier 2, the handout says, making the average bill of a Tier 2 consumer $71.32.

The average monthly bill of a consumer in Tier 3 is $2,606.93; that would increase to $3,388.88 with the proposed 30 percent across-the-board increase, the hand-out says. That is an increase of $781.95 per month. The proposed bond service fee would be $55 for Tier 3, the handout says, making the average bill of a Tier 3 consumer $2,661.93.

The proposed 30 percent across-the-board increase would bring in $429,921 per year, the handout says, and the proposed bond service fee would bring in $413,400 per year. Berry said many cities have a service fee for water and sewer, including Holiday Island and Fayetteville. Alderwoman Kristi Kendrick said she didn’t like the idea of a service fee because it puts a heavy burden on Tier 2 consumers. According to the state statute, Kendrick said, the water and sewer rates must be just, equitable and efficient.

“I don’t find the bond service fee to be just and equitable. It isn’t fair considering the amounts of water and sewer that are used,” she said. “I find the amount that’s raised on Tier 2 to be very inequitable.”

Kendrick suggested establishing a service fee that’s the same across the board, and alderman Terry McClung said that would be problematic.

“You’d never get to the desired dollar you needed,” McClung said.

Alderman David Mitchell said he supports the proposed service fee.

“The 30-percent increase at Tier 3 is shocking, and the distributed bond service payment … while it needs to be just, equitable and efficient, it is far closer to being just, equitable and efficient than 30 percent,” Mitchell said.

Finance director Lonnie Clark pointed out that the proposed service fee has a sunset clause.

“In 10 years with the bond service fee, it will be gone, because the bond will be paid,” Clark said.

Kendrick said she still couldn’t support the service fee.

“I feel that we’re throwing Tier 2 under the bus for tourist usage of water and sewer,” Kendrick said.

Alderwoman Mickey Schneider disagreed.

“This is a tourist town. I am not about to sit here and pay 50 million bucks a year because we have a whole lot of visitors taking hour-long showers,” Schneider said. “When you live in a tourist town, accommodations are made in regards to the use of water. We do have a lot of water usage. Therefore, the areas that have more tourist usage than regular are the ones who have to pay.”

If the council could decide on a plan, Berry said, the public hearing scheduled for March 29 could still go on. Mitchell moved to approve the proposed service fee, and Schneider asked why.

“Is not a public hearing supposed to be giving them all the facts? Why are we limiting it? Why aren’t we telling them all of it?” Schneider said.

Alderman Terry McClung said the council would need something to present at the public hearing.

“There are a lot of things that are going to be discussed at the public hearing. You just have to have a focal point to start from,” McClung said.

Kendrick said the state statute requires the council to establish the proposed plan by ordinance before holding a public hearing.

“Then, after the ordinance is introduced and before it’s finally enacted, is the hearing. So if this is what we pass, that’s passing an ordinance,” Kendrick said.

City attorney Tim Weaver agreed.

“It does appear that there should be a drafted ordinance,” Weaver said.

“But it doesn’t preclude us from having a public hearing and drafting it after,” Schneider responded.

“It appears it does. It appears the intent is so the populace knows what the city council intends to enact,” Weaver said.

Alderman Bob Thomas pointed out that the council could make changes to the proposed ordinance after receiving input at the public hearing, and Schneider said she’d rather have a public meeting first where every option could be discussed.

The council agreed, deciding to hold the public meeting at 6 p.m. Wednesday, March 29, at The Auditorium.

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