Eureka Springs council holds off on final approval for rate increase

The Eureka Springs City Council took the first step in raising water and sewer rates aimed to support repairs to a failing wastewater system, but will wait to make a final decision pending research into possible alternatives that won’t impact residents as much.

At its regular meeting held Monday, Sept. 23, the council voted unanimously to approve the first and second readings of an ordinance that would raise water and sewer rates by 25 percent, but held off on a third and final vote after city public works director Simon Wiley said he and city finance director Michael Akins were talking in the back of the room and think they can come up with alternatives that wouldn’t be such a burden on residents, especially those on fixed incomes.

Eureka Springs is unique, Wiley said, because although there are only roughly 2,300 residents, the water and sewer system is used by “tens of thousands” of people each year with the constant influx of tourism, the city’s only industry.

“We were talking back there about Hot Springs in particular, because they’re pretty much the next tourist destination here in the state in our opinion,” Wiley said about a conversation he had with Akins while the council was discussing the need to raise water and sewer rates. “The way Hot Springs has their rate structure is their rates are different inside and outside the city limits, much like ours, but it is based off whether you’re commercial and industrial versus residential, and also your meter size.

“So, there’s other ways of doing this where we can get the burden from the local residents that are here on limited income. Typically, what we’ve done in the past is a percentage across the board kind of thing and we can explore if you’d like, for the next council meeting.”

Wiley said he feels there could be three options brought to the table for council members, all that would equate to the 25 percent across-the-board increase that city officials believe is necessary based on a recent study done by representatives from McClelland Engineers.

“I believe we come out with a total of three alternatives,” Wiley said. “We can do the 25 percent across the board. We already know what that one is because we have that here before you tonight. We can also look at based off of meter size … and then based off commercial and industrial, which I don’t think we have any industrial, but commercial versus residential and come up with some numbers that way.”

Council member Harry Meyer responded: “Sounds like a good idea to me,” and council member David Avanzino, a business owner, agreed, but said he was cautious about going too one-sided on commercial customers.

“I really like the idea of three choices. That sounds good,” Avanzino said. “However, I also want to keep in mind … the residents on fixed income, I completely get that. But, we also need to keep in mind our businesses, our commercial businesses that help support our residents. I don’t want to see a jacked-up price of way too high just because they’re commercial.”

Mayor Butch Berry asked Wiley if putting off a vote on a rate increase for two more weeks until the council’s next meeting on Monday, Oct. 14, would adversely affect anything with the urgent situation with wastewater repairs.

“I don’t think that in two weeks we’re going to be much worse off than we are right now,” Wiley said. “I do think it would do a service to the public if we hold off and let us present those three different tiers of rate structures and then discuss that at the next council meeting.”

Berry responded: “So, I don’t know whether we’re really under any pressure to do things as soon as possible.”

“Yeah, we need to do it,” Wiley replied. “I mean, we’re going in the red all the time. So, we need to pass something. But, I think there’s other ways that we could achieve the same result and maybe mitigate some of the impact on the residents here in the community that are on fixed incomes per se.”

The need for a rate increase comes after discussions of long-needed wastewater repairs and a rate study conducted as a result of Act 605, which is based “off population level,” Wiley said.

“Your end users, essentially,” Wiley said. “Our population situation sits about 2,300 approximately. But even though we’re a city of 2,300 people that live here full time, on the weekend we could be 20,000 people pretty easily. So, we’re having to run the city much like a larger city.”

Wiley used an example of Bethel Heights, a city between Springdale and Lowell that had a sewer system that was out of compliance.

“They ended up having to unincorporate and incorporate into the city of Springdale,” Wiley said. “So, Bethel Heights is no more. I mean, water and wastewater is a big deal. It should be our number one responsibility to make sure that the public health and safety is our number one priority.”

Berry told council members that he recently learned that Huntsville is raising its water rates 100 percent.

“So, we’re not alone,” the mayor said. “Every city in Arkansas is having to raise their rates.”

Council member Terry McClung brought up the possibility of an “improvement district tax,” but Berry reminded council members that a tax would have to be approved by residents.

“Four years ago we tried to pass a tax, a 1-cent sales tax with a quarter of it going to The Auditorium and three-quarters of it going to water and sewer,” Berry said. “It got defeated heavily.”

McClung responded: “That’s right, it did. But maybe it might be a different way. You know, it’s a different time, it’s a different day. It might be worth trying again.”

Council member Autumn Slane brought up the idea of raising parking rates to help raise money needed for the infrastructure repairs. Currently parking downtown is $1 an hour, which raises about $150,000 a year for the city, Slane said.

“If we raise to $2 that’s $300,000,” she said. “If we raise to $3 that’s $450,000. That’s a perfect way to charge our tourists because most of the time they’re the ones down there parking. … I mean, a dollar for parking is nowhere in the United States. A dollar an hour?

“I think it’s a great idea if we raise and some of those funds could go toward our (infrastructure and improvements.)”