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— Rates for Gentry's water and sewer customers will go up again, beginning with the bill due in January 2010.

In order to avoid another big rate hike like the 15 percent increase two years ago when the city found itself operating at a loss, the water and sewer department recommended a 3 percent, across-the-board increase to cover the costs of upkeep and maintenance on the city's water and sewer system.

Council member James Furgason questioned whether the city needed the increase at this time and whether the city would need to continue to raise rates by 3 percent each year.

"There's no increase in Social Security payments this year," Furgason said. "Instead of inflation, we have deflation, and there's the possibility of a 10 to 15 percent increase on utilities if certain (Cap and Trade) legislation passes," he said.

"We really need more than 3 percent, but I'm not asking for it," city public works director David McNair said. "The increase is to cover depreciation, which is basically to replace worn out parts with new ones," he said, explaining that they had replaced much, but other parts of the system could fail and easily cost the city into the hundreds of thousands of dollars.

"We used up a lot of our reserve money on the highway project," McNair said.

The city had to pay for a portion of relocating the city's utilities when Arkansas Highway 59 was widened. Needed upgrades were made as well during the project.

"We're not near having a 10 percent reserve fund yet," McNair said. "We have closer to 2 or 3 percent, but we're trying to reach the standard of 10 percent."

Once the city has an adequate reserve fund to cover upkeep and replacement costs, increases could be less each year, McNair said, adding a caution that at some point in the future major upgrades in the city's sewage treatment plant would be required which will not be covered by the small increases in sewer charges.

The 3 percent increase adopted on Monday will amount to less than a dollar a month for water and sewer customers paying the minimum rates, McNair explained.

The ordinance adjusting water and sewer rates passed unanimously on three readings with a single vote.

News, Pages 1, 2 on 09/16/2009

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