DECATUR — The city will absorb the cost of a $1.50 per water meter special assessment from the Benton Washington Regional Public Water Authority instead of passing it on to customers, city council members decided Monday night.
On July 1, the BWRPWA Board of Directors voted to place an assessment of $1.50 per metered customer each month beginning in October of 2010 and ending in December of 2011. After December of 2011, the assessment will automatically sunset without any additional action from the board, according to a memo from board chairman Larry Oelrich.
The action was necessary because of declining revenue due to low interest rates and cool rainy summers, as well as other shortfalls. The memo explains that, unlike a rate increase, the assessment does not depend on sales quantity and will provide a fairly steady revenue stream to meet the obligations with a minimal impact to customers.
Public works director James Boston estimated the assessment will cost the city $1,400 to $1,500 a month.
Mayor Bill Montgomery suggested increasing production from the city’s wells to offset the cost rather than passing the additional $1.50 on to customers. Montgomery explained that three of the city’s four water towers have been repaired in the last four months. During that time, the city has had to buy more water from BWRPWA and rely less on its own wells.
Since the repairs were completed on Monday, the wells could be used at their original capacity, saving the city the extra $1,400 to $1,500 a month.
“I would hate to tack an extra $1.50 on the community’s water bills. I feel we can absorb the costs by cutting back,” Montgomery said.
Councilman David Sutton asked how it would effect the Two-Ton Water Authority if all the cities cut back on there usage to offset the cost.
Montgomery explained that only Decatur and Prairie Grove have the option of using their own wells.
Councilman Trip Lapham pointed out the city would only be going back to the level of water it used before the water tower repairs.
“I don’t think we should pass it on to the customers because that is coming in the future. We’ve got the money in the water department,” said councilwoman Reagina Davis.
In other business, Montgomery commended the council for the amount of money in the contingency fund. The fund has nearly $300,000 in it, up from around $250,000 at this time last year.
Several years ago the city was using contingency funds to help pay the bills, but becauseof the council’s adjustments, the contingency fund is doing very well, Montgomery said. The city is able to put back about $5,000 per month in contingency.
“I would like to commend the council because it’s the highest I’ve seen in my time as mayor,” he said.
Montgomery said his next concern is the city streets. Many are in need of repair, but the street departmenthas already used 50 percent of its budget and is 50 percent of its way through the year, leaving little extra for repairs and overlays.
City attorney Tom Smith said he usually recommends a city keep 20 to 25 percent of its annual budget in a contingency fund.
Davis suggested putting a $300,000 cap on the contingency fund, and then putting the rest of the money in the street fund to save for repairs. The council voted to amend the budget and make the suggested changes.
News, Pages 1 on 07/14/2010