Water board reevaluating city rebates as costs soar

Thursday, July 27, 2006

Concerns over the rising cost of electricity due to soaring fuel prices had the Carroll-Boone Water District (CBWD) Board reevaluating its program of annual rebate to the cities and its cost of water Thursday at its quarterly meeting.

During a review of the financial report for a nine-month period, Office Manager Jim Allison noted that although the cost of electricity, at $309,442.51, came in under budget ($322,500) it still was a great deal higher than last year during this same period, when it was $195,468.18.

He said he was surprised and "disappointed" that water sales had not kept pace.

"What I had budgeted for water sales is down," he said. "I thought in this drought year, it would increase, but it's been steady."

Carroll-Boone charges its four member cities $1.10 per thousand gallons. This is the lowest cost among the water districts drawing water from Beaver Lake. Beaver charges $1.16, and Two-Ton $1.50. Carroll-Boone has made a practice of giving a part of its surplus income in rebates back to the cities.

"Rebates look slim in the future," he said.

"We may not do it at all," said Chairman James Yates. "The way our expenses are going, every year we need to look at the rebate and what we're spending."

Allison said that, thanks to the Board's foresight in setting aside 20 cents out of every $1.10 per thousand gallons into reserves for capital expenditures, the water district has had the funds to repair problems.

"Two-Ton is new and didn't have those reserves," he said. "They had to pop up to $1.50 for their capital improvements, and they may have to raise it more."

Yates noted Carroll-Boone can ask the cities for a five-year projection of their needs. Brad Hammond, consulting engineer with McGoodwin, Williams & Yates (MWY) said they had obtained these projections when they did a water master plan in 2003.

"We'll have to go up at some time," noted Board member Genes Bland.

Hammond reported on bids obtained for electrical work to install an emergency electrical switch to provide power from the east water treatment plant to the west plant in the event of a power failure.

He said MWY had estimated the job to cost around $50,000, but the lowest of the three bids submitted came to $74,000. The other two were more than $100,000.

"Our recommendation is that the benefit doesn't justify the cost," he said.

Brian Gartside, also with MWY, suggested the district look at making an emergency arrangement with an electrical contractor to run cable to get power to the west plant on a temporary basis should the need arise.

"You can even run conductors across the top of the ground if necessary," he said. He said in 1984 the entire Beaver Water District went down and three electrical contractors came out and got half the plant up and running in four hours.

Plant Manager John Summers said if Carroll-Boone had a problem, it wouldn't be on the scale of Beaver because it's a smaller water district.

Gartside also noted Carroll-Boone has an excellent inspection and maintenance schedule and track record, which Beaver did not have at the time.

The board approved a motion not to award the bid to anyone but to look into an emergency plan.

In other business, the board:

* Approved extending its contract for another year with Porterfield & Co. to handle its annual audit. Next year it will seek both a one-year and three-year bid for the work.

* Approved extending its contract with Mid-America Environmental for another year for sludge removal.

* Heard Summers report the Cummins generator had failed when a piston broke. Cummins replaced everything in the generator except the crankshaft bearings at a cost of $37,015.86, $13,000 less than expected.

* Heard Hammond report he and Summers agreed to delay doing a flow test on the east side plant until there is less water demand, probably sometime in October.

* Heard Allison report Bank of Eureka Springs had come back with the best CD interest rate over five other banks, so the district reinvested its funds on June 16.

Carroll-Boone's next meeting is scheduled for Thursday, Nov. 2, at 10 a.m. at the Freeman-Rany water treatment plant on Ark. Hwy. 187, west of Eureka Springs. The public is invited to attend.

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