A combined water and sewer rate increase for Maumelle residents will be decided by the Maumelle City Council at its 6 p.m. meeting today while the city waits to see whether its water utility will be absorbed by Central Arkansas Water.
The proposed increase requested by Maumelle Water Management would raise residential and commercial customer rates by 9 percent starting Sept. 1, if approved. The proposal would also add a 15 percent increase for customers billed for sprinkler use and a 5 percent increase to a debt service fee included on ratepayers' monthly bills.
The rate proposal replaced an earlier requested rate increase of 40 percent over three years, with the change being made last month after Central Arkansas Water approached the Maumelle utility about a possible merger.
The initial rate proposal was to allow the Maumelle utility to fund all short-term capital improvement projects and fully fund its reserve account. Average daily water demand has decreased by double-digit percentage points each of the past two years, hurting revenue, according to utility figures.
An example of a residential combined monthly bill for Maumelle Water Management customers is $51.61, which includes a $7.86 debt service fee. There were 7,208 residences among the utility's 10,426 metered customers as of mid-June.
With the proposed increase, that bill would rise to $55.94.
Central Arkansas Water provides drinking water to about 125,000 metered customers, primarily in Little Rock and North Little Rock. Lake Maumelle and Lake Winona are Central Arkansas Water's main water sources.
Maumelle Water Management, which uses a series of wells for its drinking water supply, would no longer exist if the merger took place. The feasibility study is set to be ready by late September.
With such a merger a possibility, City Council members are divided over whether to go ahead and vote on the rate increase or wait on the feasibility study results.
"I don't know what to expect, to be honest with you," Maumelle Mayor Mike Watson said Thursday, just ahead of the City Council agenda being filed. "There are aldermen who agree with the need for the rate increase, and I think there are aldermen who agree that we don't need a rate increase and want to wait until the Central Arkansas Water feasibility study comes back."
Alderman Steve Mosley, a critic of the city's water utility, said he is against the rate increase, especially when the increase would take effect the same month as the feasibility study is scheduled for completion.
"To me, it makes no sense to come in for a rate increase with the CAW thing going on," Mosley said. "I don't understand the rush.
"I'll be pushing for that [proposed increase] to go away," Mosley added. "I'm a no vote on that. I don't see why they continue to come in with all these rate increases."
Alderman Preston Lewis, who regularly attends the utility's board meetings, said he will support the rate increase because even if a merger with Central Arkansas Water were feasible, it would be more probable if the utility was on better financial footing.
"As it stands, that's not necessarily the case," Lewis said. "Ultimately, if we want to explore that merger and enter into negotiations with Central Arkansas Water, having our utility on solid ground is best for all. I don't want a water utility to have to go into merger discussions while in financial trouble. We don't even know if [a merger is] doable yet.
"A straight up-and-down vote, I'm in favor" of the proposed increase, Lewis said. "I think it's the responsible thing to do."
Metro on 07/20/2015