The Eureka Springs City Council has requested a draft of a proposed ordinance that would raise water and sewer rates by 25 percent.
The council made the request after hearing a report during its regular meeting on Monday, Sept. 9, concerning the dire need for repairs to the city’s sewer system.
Zane Lewis with McClelland Engineers told council members that issues with the city’s sewer system have gotten so bad that immediate action is needed to help with funding the required repairs. Recent issues now include e-coli levels that have become high in Leatherwood Creek, Lewis and city public works director Simon Wiley told council members.
“As we’ve learned, most of it was built prior to the mid-90s,” Lewis said of the sewer system. “So, we have basically been able to understand what we suspected, which is that most of your water and sewer infrastructure has gone beyond its useful life.
“… When that occurs, we would anticipate a fairly progressive series of failure of every single piece of infrastructure. That appears to be what’s happening at the wastewater plant. We’re also trying to help troubleshoot … and come up with what would be probably even within the scope of the plan that we have presented previously for work at the treatment plant. But, it’s becoming a much bigger problem than it was previously. Therefore, it’s unclear whether the regulatory agencies would allow us to wait to do something all as one big project versus having to address that just for the e-coli issues in the creek.”
Lewis said the city’s rate study still isn’t complete, but does estimate the needed work to replace the wastewater system to be between “$140 million and $150 million.”
“… If we were to try to go rebuild it next year,” Lewis said. “With that in mind, we now have a better gauge on what we would be recommending for funding a depreciation portion of the water and sewer utility rate structure, which is not currently being funded. Why that makes a difference is that to comply with the Act 605 that is required, and so all this work to understand how much your assets are worth basically determined the value of what that will need to be as it goes into the rates.
“So, we believe … that we’re going to need to be spending like $5 million a year starting as soon as possible if we want to keep up with the infrastructure that is currently degrading and not be playing reactive to all the problems that occur.”
Lewis said McClelland would recommend a 30-year plan for the project.
“That’s where we come up with the approximately $4 million to $5 million a year if you’re trying to rebuild the entire system in 30 years,” Lewis said. “… We’re trying to make a responsible recommendation for how much rates should be increased and comply with state laws …” At least a 50 percent water and sewer rate increase is recommended, Lewis said.
“We feel very confident that we will be recommending more than a 50 percent rate increase,” he said. “We’re not sure whether it would be double that or even more than that yet, but it is clear that there is no possible way it would be less than … a 50 percent increase to both water and sewer rates across all meter sizes.”
Getting ahead of the issue now is important, Lewis said, adding that rate increases now, at the end of the year, and another at the beginning of next year would likely be necessary.
“We would definitely see a positive impact on any rate increase immediately by the generation of those revenues, and that could go into the budgets that will be achieved before the end of the year,” Lewis said.
Council members told Lewis they understand the severity of the problems.
“It doesn’t pass by anybody here,” council member Terry Mc-Clung said. “We all understand that the problem is serious.
“If we can’t get the government on board to subsidize this and help us, I don’t know how we can ever meet it. I really don’t.”
McClung said potentially doubling water rates is going to be a “tough sell” to residents.
“This council will have to bite the bullet and probably just do that, which we’re willing to do,” McClung said. “I mean, we may not be sitting at this table in two more years.”
Lewis told council members that Eureka Springs’ rates are “some of the lowest for water and sewer in the region.”
“So, relative to that metric, it’s not unreasonable to think about some of these increases,” Lewis said.
Council member Harry Meyer said rate increases probably should have been approved in the past.
“In the past we have avoided a rate increase when we should have done it,” Meyer said. “A whole bunch of money from the general fund has gone into the water and sewer department as a loan. We can’t just give that loan, we’ve got to pay it back. The water and sewer department has to pay the city back that money, and it’s going to be in these rate increases because that’s part of the expense.
“The longer we wait, the worse it’s going to be for our subscribers.”
Lewis said two federal funding applications have been submitted that, if approved, would help the funding situation.
“The most easy answer is that when we get to the point where are now, where we are not proactively replacing things … as an industry we can document that we will spend between 50 and 150 percent more fixing things when we’re doing it on the fly in a reactive way,” Lewis said. “So, those are directly related to your rates and what your children’s rates will be.
“The acute issues of the leak is don’t go swimming in [Leatherwood Creek] downstream from the plant until that gets resolved. You’ll get sick.”
While some wells along Leatherwood Creek could possibly be impacted by the leak, city customers get water from Beaver Lake and wouldn’t be affected, Lewis said.
“The other thing is, those fines that if the regulatory agencies don’t think we’re dong a good job, eventually they will come in,” Lewis said. “We’ve talked openly about how we thought we were going to have a consent order from ADEQ by now, and I really think it’s a miracle we don’t.”
McClung asked Lewis if he felt the city was doing everything it could to “stay afloat so they’re not going to shut us down.”
“I would say that it is a miracle,” Lewis said. “I would say that you guys have all been witnessing an ever going miracle that the systems are functioning.”
After Lewis clarified to council members that he suggested at least a 25 percent rate increase as soon as possible with another one to come by the end of the year and then another at the end of the first quarter of 2025, McClung motioned to get an ordinance drafted for an initial 25 percent increase.
“I think we all recognize this emergency,” McClung said. “I’d like to make a motion that we ask the city attorney to draft an ordinance …” Council member David Avanzino responded: “As much as I do not want to, I will second that.”
“We’ve got to have water and we’ve got to be able to flush the toilet,” Meyer said.
The vote passed unanimously.
