Friday, March 07, 2014

TOP STORY >> Water rates to go up for project

Leader staff writer

The Jacksonville City Council on Thursday learned residents’ water bills would go up this month because of an agreement Jacksonville Water Works made to pay $48,000 a month for the Lonoke-White project.

The increase on water bills will be tied to consumption — how much water a customer uses — rather than appear as a line item, Water Works general manager Jake Short said.

The cost for those who use the least amount — 2,000 gallons or less — will be about 81 cents more each month. Short said a typical customer uses 5,000 gallons and the cost for them will be about $1.91 more per month. The utility’s first $48,000 payment is due April 1.

Jacksonville will begin receiving water in mid-2014 through the decades-long $57 million Lonoke-White Water project that will pump water from Greers Ferry Lake.

The city is one of eight Lonoke-White Public Water Authority members.

The others are Beebe, Ward, Austin, Furlow, North Pulaski, Vilonia and Grand Prairie Bayou Two.

The project is funded by a state loan of $31 million and a federal loan of $26 million.

It will provide a secondary source of water to Jacksonville in case a catastrophic event cuts the city off from its primary sources, Short explained previously.

He told the council on Thursday that the utility, like the rest of the authority’s members, agreed to pay $5 multiplied by the number of meters it had when the project began.

Jacksonville had 9,667 meters then for a total fee of $48,335.

The money from all of the authority’s members will pay off the loans used to construct the intake water treatment plant at Greers Ferry Lake and more than 50 miles of transmission mains, Short said.

Jacksonville residents began seeing some of the first half of the Lonoke-White fee on their bills in 2009.

The second half of the fee will be seen on their bills this month, Short told the council.

The fee is a pass-through charge, not a rate increase, City Attorney Robert Bamburg explained after the meeting.

Although bills go up in both cases, “a pass-through is a charge that comes from the Although bills go up in both cases, “a pass-through is a charge that comes from the water authority, CAW, Lonoke-White, whoever. Those are directly implemented to us, whether it’s per customer, per 1,000 gallons or whatever the case may be. And we have to pass it on to the customer,” he said.

“A rate increase is when the utility comes to the council and says ‘we’ve gone over our rates and we are no longer able to cover all of our bills and our obligations and we are asking you all to authorize a new rate,” he continued. Pass-through fees do not require council approval and public hearings, which are needed for rate increases.

Short continued, “While we sympathize that stuff like this is tough for people, this is an important project.”

He also pointed out that Jacksonville has ownership in the project through a seat on the authority’s board.

Mayor Gary Fletcher said, “This does a couple of things, Lonoke-White. One is I think it’s going to bring some stability in our future rate increases that we haven’t had that luxury in the past by having more than one straw in one source of water. Now we have two.”

Mentioning droughts that have occurred in other states over the past few hears, he continued, “Water is going to be a very important commodity…We need to position ourselves.”

Fletcher said, “(Lonoke-White is) laying the groundwork for infrastructure to grow our city and give our city a great future. Water is just going to determine the growth and the future. It really is and whether growth is going to happen, we’ve jockeyed or positioned ourselves into a great position for the future. It didn’t come cheap. It’s not going to come cheap and, by the way, it’s not going to be cheap in the future either. You think gas is high? Water is going to be even higher.”

Alderman Bill Howard pointed out that Central Arkansas Water recently handed down a 50-cent pass-through charge and asked if Short anticipates more pass-through charges.

Short said it’s hard to say, but he has talked with a CAW official and another pass-through charge may be coming in 2015. But, the manager added, Jacksonville Waste Water is renegotiating its contract with CAW right now.

Short also told the council that Jacksonville Water Works passed significant rate increases in 2009 and 2012. The first $2.50 of the $5 per meter fee owed to the authority was worked into those increases, he said.

Jacksonville Water Works made its first payments to the authority in 2012. Since then, the utility’s reserves have become depleted.

“We held off as long as we could,” Short told the council

Aldermen James Bolden, who was on the city’s water commission before joining the council in 2012, added, “The commission really analyzed to make sure that the city didn’t get screwed. We really examined” when the fee agreement was signed at the beginning of the Lonoke-White project.