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Raising water rates wouldn’t help Little Rock residents very much

Sherwood city leaders a few months ago approached the board governing of Central Arkansas Water to see if they could be charged the same rates as North Little Rock and Little Rock users.

Sherwood Mayor Virginia Hillman said some residents in her city have complained for years that they pay more for water usage than do North Little Rock water users. After the Sherwood delegation made their case, CAW officials said they would take into consideration the concerns of Sherwood city leaders.

A few months following the friendly visit, the CAW board viewed a water rate scenario during its regular February board meeting where the idea was looked at if customers outside of Little Rock and North Little Rock were charged even higher rates to save those cities customers from experiencing higher rates.

The study was done following concern expressed by some Little Rock CAW board members who questioned if wholesale water customers outside of North Little Rock and Little Rock were being charged the entire cost of buying the water.

Graham Rich, CAW’s chief executive officer, said the idea of charging non Little Rock and North Little Rock customers even more is not under consideration at the present time.

Raising rates also could have an impact on Jacksonville residents because that city’s water utility buys some of its water from Central Arkansas Water.

The water rates of Little Rock and North Little Rock have historically not been equal, according to the Power Point Presentation shown at the CAW board meeting.

There currently is no longer a contract between North Little Rock and Little Rock. In 1999, Little Rock passed an ordinance that lowered its residential rates by one percent and its commercial rates by 15 percent, but raised North Little Rock rates by 39 percent.

The disparity of the rates eventually led to the creation of Central Arkansas Water.

Prior to CAW’s creation, Little Rock and North Little Rock officials were trying to figure out ways to serve their customers and expend funds for the betterment and improvement of the utility’s infrastructure solely on the basis of the needs of a consolidated water system as a whole and not on a geographic location.

At that time, a consolidation agreement was adopted that established rates using cost-of-service methodology. Officials then also wanted to plan for a third source of water and go ahead with a broad based process to arrive at a regional decision with respect to the third source.

Two water sources have been Lake Winona, built in 1938, which was estimated that it would provide “twice the estimated required capacity for the City in the year of 1975”

The second source of water, Lake Maumelle, was built in 1958.

CAW board members were advised that debt levels are expected to stay at the $8 million level through 2023 with them projected to go down to about $6.5 million in 2024 and lower than $1 million in 2034, provided no other borrowing takes place in the next 20 years.

Board members were advised that unless rates were increased substantially on non Little Rock and North Little Rock rate powers it would not lead to noticeably lower rates for residents of the two cities.

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