ROGERS — Water consumption increased in June compared with June 2009, and the water utility would have had a $50,000 profit if not for a $400,000 lawsuit liability.
The year-to-date operating loss of $486,000 in June 2010 — adjusted by the lawsuit expense of $400,000 for comparison purposes — is about $341,000 less than the loss in 2009 of $427,000, according to Joyce Johnson, finance director for the utility.
The utility settled a lawsuit with Northwest Arkansas Home Builder Association and Burckart Construction in March. Burckart and the association sued the utility claiming access and hook-up fees were an illegal tax.
The utility agreed to pay $200,000 in legal fees and set aside additional money to repay anyone charged the fees. Those who paid the fees would be entitled to vouchers worth 53 percent of the amount of fees paid and have 120 days to claim a voucher. The recipient has five years to use the voucher.
“The utility is continuing to use the same estimate for the lawsuit costs that we used in the budget process. However, a final determination will need to be made after the court holds a final approval hearing currently set for Sept. 9. This will probably result in the need for an audit adjustment to reflect the actual operating results for June 30,” said Johnson at a meeting of the Waterworks and Sewer Commission on Monday.
Tom McAlister, utility superintendent, said the commission decided to settle rather than fight the lawsuit because it could cost ratepayers more in the long run.
Commissioners approved a $283,298 contract with Fouchtman Enterprises of Fayetteville to replace sewer lines at 10th Street and Will Rogers Drive, the first project under a rehabilitation program.
The utility set aside $1.2 million to find and replace deteriorating concrete sewer lines in the older section of Rogers. The money is not part of the utility’s capital improvement plan.
Commissioners also approved a request from Jeff Bates to provide water service to the Dollar General store in Prairie Creek. The City Council must approve the request.
At A Glance
Seeking New Member
The Waterworks and Sewer Commission is seeking a member to replace Lon Pepple who died last month. The search was extended for a month after no applications were received. For more information about the appointment, contact Tom McAlister at 621-1142.
Source: Staff Report