BENTON - Benton's Public Utility Commission is seeking to raise water and sewer rates next year.
City Council members are scheduled to hear the pitch for the increases at a committee meeting today.
The average household's monthly water and sewer bill would jump from $46.50 to $52.96, Benton utilities manager Terry McKinney estimated.
Increased costs of doing business and the projected depletion next year of contingency funds the utility department relies on are among the chief reasons the city-owned utility is strapped for cash, city officials said.
The proposal, which is to be pitched at the council's Finance Committee meeting, is already facing resistance.
"I'm not convinced the rates are legit yet," said Alderman Joe Lee Richards, who noted that he is against "all rate increases and taxes."
The proposed rates were to take effect with the start of the new year, but the council wanted more time to mull it over. Now the soonest customers would see an increase would be February if the council adopts the plan at its January meeting.
The base rate for water would increase by $2 and the rate for every additional 1,000 gallons consumed would increase by 35 cents. Those rates haven't gone up since 1997.
Sewer rates, however, went up last year. Under the proposal, the base rate would rise by $3.10.
Even with such a rate increase, both the water and sewer utilities will be in the red next year, McKinney said.
He's projecting a budget shortfall of $260,000 for sewerand $90,000 on the water side.
"Based on this, we're going to tighten the belt and see," he said.
He said the financial picture should improve by 2016 when debt for various improvement projects are retired.
Making the situation even grimmer is that the contingency fund the city set up for the utility is running dry.
Alderman Jerry Ponder said by next year the remaining $800,000 or so will be gone. That fund has helped offset recent electricity rate increases for residents, he said.
Energy rates jumped by about 53 percent to 57 percent for residential users in early 2007 after a contract with Entergy Arkansas expired. It would have been worse if that fund had not been tapped, he said.
With that fund disappearing and the economic picture bleak, Ponder said, he thinks the increase is essential.
"I'm inclined to believe our revenues for 2009 may very well be less than in 2008," he said.
City officials noted that even with the proposed increase, Benton's rates would still be lower than nearby Bryant's.
Indeed, Bryant's water and sewer rates that took effect thismonth are steeper. Residents there pay a base rate of $12.82 for sewer and $6.26 per 1,000 gallons thereafter. Water rates for all but one meter size range from 66 cents to about $300more than Benton's proposed rates, depending on meter size. Every additional 1,000 gallons of water consumed is billed at $4.12, compared to Benton's proposed $2.99.
Arkansas, Pages 11, 14 on 12/18/2008