'16 to bring 4.75% sewer-bill rise

Pipe replacement, personnel raising costs, utility says

Operating and maintenance expenses at Little Rock Wastewater are budgeted to increase 4.4 percent to $26.6 million next year, partly because of employee raises, the addition of two staff positions and the expansion of a pipe replacement program.

The new year also brings with it a 4.75 percent rate increase on sewer bills, starting Jan. 1.

The Little Rock Water Reclamation Commission, which oversees certain finances and operations of the utility, reviewed the proposed 2016 budget at its meeting Wednesday and is expected to vote on the document next month.

Chief Executive Officer Greg Ramon said he is proud expenses for current programs stayed within 2 percent of this year's costs. He also touted ways the utility has saved money and an extension on a deadline to meet court-ordered capital improvements.

"We would never have been able to do this if all those things didn't come into play. All those things had a monumental impact on our ability to keep the budget at a low number," he said.

The Jan. 1 rate increase was planned and authorized three years ago. Revenue from the increase is earmarked to pay off 2013 bonds. This year, the city Board of Directors approved another round of increases that will increase monthly sewer charges by 4.75 percent every year from 2017 to 2021.

For a customer who pays $30 a month now for sewer services, their payment will increase to $31.43 starting in January. The franchise fee -- a 10 percent charge levied on all sewer bills -- will rise from $3 to $3.14. By 2021, the customer will pay $39.64 a month with a $3.96 franchise fee.

Part of the rise in Little Rock Wastewater's 2016 budget is for a 2.5 percent raise for employees, with the exception of executive staff members, who will receive a 2 percent salary increase.

For most employees, the pay jump will be offset by an increase in health care costs and a policy change that requires them to pay 20 percent of their premiums. Previously, the company paid the premium in full for employees on a single plan.

Ramon also is asking for two new positions to be added, which would take the staff to 217 employees.

The major change is the addition of a chief legal officer, which would switch the agency from a contract agreement to a full-time, in-house attorney.

With a number of regulatory changes expected to come up in the next five years, having someone on staff with institutional knowledge of those details will be important, Ramon said.

"Right now, we call when we have a legal question or we want a decision on something. We pick up the phone or meet. And too many of these are coming up where we really need someone on staff to help us, guide us on some of these things without us making the decision ourselves," he said.

The budget also plans for an expansion of the Sewer Service Line Replacement Program that allows customers to be reimbursed up to $2,500 of the cost to replace their private sewer mains that connect to the public system.

The utility plans to double the number of reimbursements it grants in a year. It can currently reimburse 260 to 270 customers. So far this year, 252 customers have been approved through the program.

Right now the program is solely funded through a $1 service charge on customers' monthly bills. The expansion will be funded from bonds taken out next year on one of the future rate increases.

The second position to be added in 2016 would be a specialist to oversee the reimbursement program.

Ramon and his staff were able to decrease some projected expenses for next year by putting in place a vehicle replacement program.

"We've come up with ways to get rid of those vehicles we are seeing with lots of maintenance coming up that is costly, and replacing them with more reliable vehicles. In the process, we have reduced how many we are buying because we have good stock that has been maintained well," Ramon said.

The utility also will increase its focus on improving the public sewer system in coming years. It expects to spend $1.4 million on replacing sewer mains in 2016, in addition to spending $450,000 on new mains.

With all expenses taken into account -- including operating expenses, debt service, and payments to certain mandated accounts, such as allocation for future debt service -- the utility expects to pay out just under $85 million in the new year. Its revenue -- which includes customer payments, surcharges, and revenue from bonds and grants -- is budgeted at $85.1 million.

The projected revenue and expenses are up from $74.7 million and $72.9 million, respectively, from this year.

Commissioner Ken Griffey, who served on the budget committee, said he's pleased with the result.

"Based on some of my questions, some adjustments and even some corrections were made. ... I'm very comfortable with where the budget lies at this point," he said.

Metro on 11/19/2015

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