A water supplier serving four rural counties in Northwest Arkansas continues to run a deficit each month, the chairman said.
By the end of January, Ozark Mountain Regional Public Water Authority likely will begin relying on credit to make up the difference, said Andy Anderson, chairman for the water authority board.
Anderson projected the water authority would end last year with $28,381.20, with payment due on bills for repair work in January.
"I don't think we have enough money in our account to cover those that are outstanding and our expenses because of the shortfall," Anderson said.
The shortfall comes after months of nonpayment from two of the authority's 18 members that the water authority sued in 2013. One member, Lead Hill, a town in Boone County, resumed payments in September but still owes the water authority $64,939.62 in overdue charges.
Marshall, a city in Searcy County, has not paid the water authority since water service began in August 2013 and has an outstanding balance of $451,032.53 in water charges alone, Anderson said.
The water authority spent more than two years and $72 million building a water-treatment facility and 120 miles of pipeline to supply 18 member towns, cities and utilities with water from Bull Shoals Lake. The U.S. Agriculture Department contributed $36.4 million in grants and a $19.37 million loan for the project.
The municipal water providers signed contracts with the water authority in 2009 that served as collateral for the loan. All members were connected by September 2013.
The water authority spends an average of $147,704 per month, nearly $27,000 more than it receives in income, which averages $120,832.75, Anderson said. The water authority has overcome the ongoing shortfall with some contingency money provided by the U.S. Agriculture Department and the Arkansas Natural Resources Commission, but those funds have been exhausted, he said.
The Marshall City Council voted in November 2013 to go back to receiving water from its former source, Hughes Spring, but remained on the Ozark Mountain system because of state Department of Health requirements.
The water authority sued Marshall in December 2013 and won a summary judgment in September. An attorney for the city filed a special bond with the court promising to pay if the judgment stands on appeal. The water authority has asked the court to set aside the bond.
Marshall's recently elected Mayor Kevin Elliott anticipates meeting with the City Council to discuss the water dispute, either at its Jan. 12 meeting or sooner.
Elliott said he will follow the City Council's direction. He anticipates mixed opinions because the city uses about 200,000 gallons of water a day, and the required minimum payment of $28,298.21 is based on usage of 305,000 gallons of water per day, he said.
Elliott, who has been the city's water operator for 21 years, would like to reconnect to the spring, but he said that would require significant upgrades to the city's old water system. He also understands the city is under contract with the water authority, he said.
"If it's up to me, if the city of Marshall uses the water, they need to pay for the water," he said.
The authority began providing water to Lead Hill in November 2012, but in October 2013 the Town Council voted to reconnect to the city's old well system and to stop making payments to the water authority.
The water authority sued the town in October 2013, and a circuit judge ruled in May that Lead Hill must abide by its contract. The town reconnected to the Ozark Mountain system Aug. 7 and made the first court-ordered payment of $5,199.26 in September.
The city is not due to begin making payments on the remaining overdue charges until the spring, when the town begins receiving revenue from a 1 percent sales tax its voters approved in November, Anderson said.
Lead Hill's incoming mayor, Gary Van Meter, said an appeal of the May judgment has been filed, and the town is awaiting a court date.
NW News on 01/05/2015