Springdale Water Utilities Planning Construction Costs

STAFF PHOTO DAVID GOTTSCHALK 
Dan Jones, right, distribution manager with Springdale Water Utilities, reaches over for a drainage hose Friday from Randy Rogers, distribution operator, as Jeremy Mounce, distribution operator, climbs out of a ditch on 56th street in Springdale near County Line Road. The crew repaired a 1-inch service line coming off of a main water line with a leak.

STAFF PHOTO DAVID GOTTSCHALK Dan Jones, right, distribution manager with Springdale Water Utilities, reaches over for a drainage hose Friday from Randy Rogers, distribution operator, as Jeremy Mounce, distribution operator, climbs out of a ditch on 56th street in Springdale near County Line Road. The crew repaired a 1-inch service line coming off of a main water line with a leak.

Monday, February 3, 2014

— Long-term plans at Springdale Water Utilities show a rate increase may be needed to cover construction expense.

The projections show the utility could run through all its money, including reserve, by 2020 if rates are not raised. The reserve balance is $48.5 million. With water and sewer rate increases, the utility would maintain a minimum reserve through 2025, according to a financial planning summary.

By The Numbers

Projected Construction Costs for Springdale Water Utilities

Costs expected between 2014 and 2025

Current Projects*$8.6 million

Water Construction*34.8 million

Sewer Construction*$71.6 million

Water Rehabilitation*$11.6 million

Sewer Rehabilitation*$12.8 Million

Wastewater Plant Improvements*$30 million

Other costs*$6.1 million

Total*$175.5 million

Source: Springdale Water Utilities

The projections were done so the utility could be good stewards of its customers’ money, said Chris Weiser, chairman of the Springdale Water and Sewer Commission.

“We have to look to the future to see what needs to be done,” Weiser said. “If we are going to need more money, we need to do it quickly enough so that we won’t need a large rate increase that would negatively affect our customers.”

Officials at Rogers Water Utilities have not updated its financial plans recently, said Earl Rausch, interim superintendent, but they plan to do so soon.

“You have to look at your revenue stream frequently to find out what you can do to improve your system,” Rausch said.

The projection in Springdale’s plan that keeps money in reserve involves a water rate increase of 15 cents per 1,000 gallons used in 2014 and 5 cents per 1,000 gallons in both 2015 and 2016. There would also be a sewer rate increase of 10 cents per 1,000 gallons in 2014 and 5 cents per gallon in both 2015 and 2016.

Those increases were only used for projections, said Heath Ward, utility executive director. The commission has not asked for any increases in rates, Weiser said.

It will be some time before the commission knows what the utility’s financial requirements will be, Weiser said.

The biggest unknown is how expensive improvements will be at the wastewater treatment plant, Ward said. The projection includes $30 million in improvements to the Springdale plant in order to lower phosphorus levels in effluent, he said.

“That is our biggest wild card,” Ward said of treatment plant improvements. “We don’t know how much it will cost and when it will come. We felt we had to include it in our projection so people will be aware of the worst-case scenario.”

The commission is also considering updating sewer and water master plans. The current plan, drawn up in 2006 and 2007, call for system expansions over the next 20 years that could cost $160 million.

The wastewater system needs expansion, said Jim McGuire, a resident of Springdale.

McGuire has city water at his house on Reed Avenue, but not sewer.

“I would like to have sewer,” McGuire said. “There is a lot of open land in this area which will be developed soon.”

Improvements to Arkansas 265 and Arkansas 264 are planned for the area, as is construction of the U.S. 412 bypass, he said.

The area could develop as residential or could go to commercial and industrial, McGuire said.

The projections included $34.8 million for water system expansion and $71.6 million in sewer system expansion. Also included was $11.6 million in water system repairs and $12.8 million in sewer system repairs. Those would be spread over 11 years.

The $30 million for the sewer plant, however, could be spent in two years, Ward said.

How much phosphorus must be removed from a treatment plant’s effluent is a big concern for all area water utilities, he said.

Phosphorus in the Illinois River in Oklahoma is blamed for degrading the stream’s water quality. The Illinois, a scenic river in Oklahoma, extends into Arkansas with portions of Bentonville, Springdale, Rogers and Fayetteville inside its watershed.

The Oklahoma Water Resources Board established a standard of 0.037 milligrams per liter of phosphorus in Oklahoma Scenic Rivers. Northwest Arkansas wastewater plants have been lowering phosphorus levels since that standard was set, Ward said.

Phosphorus in the Springdale Wastewater Plant effluent was 0.23 milligrams per liter for the last 12 months, according to utility records.

“We’ve brought that down from 8.4 (milligrams per liter) in 2002,” said Rick Pulvirenti, utility director of engineering. “We can’t do any more with what we have at the plant.”

A group of Arkansas and Oklahoma residents is studying the river to see if a standard can be set that is agreeable to both states.

“The 0.037 standard was not set by using science,” Ward said. “That’s what we have always wanted, a standard set using scientific data.”

The study will take two to three years to complete, with implementation of any changes taking more time, Ward said.

Another big expense is looming, Ward said. Sewer plants could be required to remove minerals from effluent, he said.

Removing phosphorus would be simple compared to removing minerals, Ward said.

The cost to do so could range from $40 million to $80 million, Rausch said.

“If you take the minerals out, you wouldn’t even have to worry about phosphorus levels,” Rausch said. “Your output would be cleaner than any stream it would go into.”

The Arkansas Legislature Rules and Regulations Subcommittee will hold a hearing on proposed revisions to the Arkansas Pollution Control and Ecology Commission regulations regarding standards for minerals in wastewater Wednesday, Ward said.