Eureka Springs council gives final OK to rate increases

Residents in Eureka Springs will soon see higher rates on their water and sewer bills.

At its regular meeting held Monday, Oct. 28, the Eureka Springs City Council approved a third and final reading of an ordinance that will implement a 25 percent rate increase “across the board” for water, and a “little bit higher” increase for sewer so the two will now match, according to city finance director Michael Akins. The council invoked an emergency clause that will make the ordinance effective immediately.

“We figured it’s almost a $10 for water and sewer on the base,” Mayor Butch Berry said. “That comes to $4 on water and $6 on sewer and that’s on the first 2,000 gallons.”

Officials said the rate increases are needed to help pay for repairs for aging systems and to help the city recoup the costs of regular recent rate increases by Carroll-Boone Water District.

“For the longest our water rates matched our sewer rates,” Akins told council members, adding that the last water increase didn’t include a sewer rate increase. “Now, that’s really hurting us. So, what we want to do is bring them back to equal like they The city is currently in the middle of a rate study, including what is needed to pay for equipment repairs, and is working to comply with Arkansas Act 605.

“Act 605 is stating that you as a water department needs to be self-sufficient and that you need to pay your normal expenses,” Akins said. “You need to be able to pay your normal expenses to run your water department and not have to have the city loaning the water department money.

“Then, when you do these big projects, like what we’re looking at doing, you want to show that the city can afford that kind of debt or that kind of bond or whatever you’re going to do to finance it with.”

The ongoing rate study shows the need for raising water rates in future years as well.

“A city our size, we should have about a year or two years to be able to get to where this rate study says we need to be,” Akins said.

Research is ongoing regarding how to set rates for residents versus businesses, council members were told, along with different programs that other cities are using to increase profits. Examples include adjusting rates based on the size of meters and possibly lowering the base rate of minimum water usage billed from 2,000 gallons to 1,000 gallons.

“Those are all ideas that are going to be coming out of this rate study,” Akins said. “Ultimately it will be a management decision of what the city council and the city wants to do. What they’re doing with this rate study is they’re saying, “OK, here’s where you kind of need to get to, and then here’s different avenues to be able to do that. Do you want to go by meter size? Do you want to lower the amount of your minimum usage? Do you want to raise just your rates overall?’ ” Raising the rates now won’t affect any outcome of the rate study because of how far the city is from where it will eventually need to be, Akins said.

Council member Harry Meyer said the city is unique with so many tourists taxing the water and sewer systems.

“Our industry is through tourism, and other places that have industry, industry is well aware that if they’ve got a meter of a certain size, they’ve got to pay for that for the availability of that water,” Meyer said. “Right now, there’s absolutely no difference between a citizen’s minimum bill and the Crescent Hotel that has a big ol’ meter, and we’ve got to provide a lot of water and a lot of sewer plant to them. So, yeah, they need to pay for that.”

All options for future plans are still on the table and are being researched, Akins said, keeping in mind the costs of projects that the city is facing.

Akins was asked how many times Carroll Boone Water District has raised rates without the city passing those increases on to for customers.

“I came in 2022 and they raised rates in 2023 and 2024…,” Akins said, adding that Carroll-Boone has been regularly implementing the increases each January. “…We raised rates in 2023, but prior to that, I believe it was 2019, 2022, somewhere along then. It had been three or four years since we had raised the rates.”

Carroll-Boone Water District has been raising the city’s rate “about 25 cents per thousand gallons,” with each increase, Akins added, saying the city has been absorbing those costs.

“Over the course of the last two or three years, there’s just been a lot of resistance at us raising rates,” he said. “A lot of people have come out and said we can’t raise rates, we don’t want to raise rates, we don’t want to do that. We had a really hard time getting the last rate raise through and we only raised water. We didn’t raise sewer. Now, we don’t have the money to pay for our sewer so now we need to substantially raise our sewer rates.

“…That’s one of the things that is going to do is require us to stay financially stable in our water department.”

Berry told council members that many cities, including Berryville and Green Forest, have ordinances in place that allow automatic rate increases each time Carroll- Boone Water District raises their rates.