Leader Blues

Monday, February 02, 2009

TOP STORY>>Jacksonville to get small rate increase

Leader staff writer

A 1 percent rate increase for all Jacksonville Water Works customers will be in effect on February bills.

On Wednesday, the Jacksonville Board of Water Commissioners approved the rate increase in response to an increase enacted the first of January by Central Arkansas Water for all its wholesale customers, which includes Jacksonville Water Works. The last increase by CAW was in 2005.

The pass-through increase ap-plies to all residential and comm-ercial customers in and outside Jacksonville city limits; included are the Jacksonville utility’s wholesale customers – Cabot, Bayou Two, and Furlow.

Under its current agreement with CAW, Jacksonville Water Works purchases 2 million gallons of water a day in winter and 3 million gallons a day in summer. The rest is supplied by local wells.

Total output averages 4.9 million gallons a day. Commissioners also approved a 45 cent watershed protection fee to go into effect in May.

The fee is being levied by CAW to protect the region that drains into Lake Maumelle and Lake Winona, sources of water supplied by CAW.

The anticipated annual revenue of $900,000 would be used to fund the watershed management program and associated projects.

The actual rate increase by CAW for its wholesale customers was 5.6 percent. Further increases are planned by CAW — in 2010 and 7.8 percent in 2011 – to meet increasing production costs, according to Gary Pittman, chief financial officer for CAW.

In the last three years, the cost of fuel has risen 100 percent, electrical power by 30 percent, water treatment chemicals by 60 percent and iron pipe by 150 percent. For Jacksonville water ratepayers, the proposed increases will be a continuation of a series of four annual “in-house” rate increases by Jacksonville Water Works that started in 2005.

A rate study is under way to better assess all costs associated with providing water to Jacksonville’s retail and wholesale customers.

The study will conclude in March and will guide commissioners’ decisions on any future changes in rates. Under study are costs of daily operations and upgrades to the local utility infrastructure, as well as Jacksonville’s share in improvements to the CAW system.

By the year 2050, daily demand on the Jacksonville utility is projected to reach 7.5 million gallons a day.

Improvements to the local and larger CAW systems will cost Jacksonville Water Works an estimated $32 million. Short-term loans and bond issues will likely be sought to “spread out extra costs to get all the improvements needed,” said Mike Simpson, Jacksonville Water Works manager.