"The last rate increase we had was 17 years ago. explained Steward. That brought our rates to $5.75 for the first 3000 gallons and $1.75 for every 1000 (gallons) after that."
The proposed structure change would see customers charged $5.75 for the first 1000 gallons and a 50 cent rate increase to $2.25 per 1000 gallons after.
"An average household will use about 5000 gallons a month," explained Steward. "That's going to raise your 5000 gallon bill from the $9.25 that it is now, to about $14.75 and that will still keep us below the average of the cities that are our size in the state."
According to information provided by Steward from the Arkansas Natural Resources Commission, Fifteen cities statewide with 2000 to 3000 sewer customers were compared with Newport. The cost of 5000 gallons sewer usage ranged form Newport ($9.25) to Holiday Island ($30.38) with an average of $17.65.
" We came up with 15 cities that were roughly the size of Newport and we compared our rates now with them and we're the lowest right now and we would still be $3 below the average of those 15 cities."
According to Steward, Information for the rate study is based on an actual number of sewer customers for October 2012 at 2,603 and an average billing for the past six months (Setptember 12 - February 13) of $41,626.16 per month. Under the current rate, 2,603 customers were billed a minimum rate of $5.75 each and an additional 15,233 gallons was billed at $1.75 per thousand. The minimum billing was $14,967.25 and the additional gallons at $1.75 per thousand was $26,657.75.
If the number of customers and sewer usage remains the same, the proposed rate structure change and rate increase would result in 2,603 customers begin billed a minimum rate of $5.75 each and an additional 19,489 gallons being billed at $2.25 per thousand. The minimum billing would remain at $14,967.25. The increase in revenue would come from the 50 cent per thousand increase for 15,233 gallons and a $2.25 per thousand increase for the additional 4,256 gallons that had previously been included in the original 3000 gallon per customer minimum.
"This increase will generate about $200,000 a year more than what were bringing in right now and what we will hope to be able to do is bank that money for somewhere around five to seven years and by then our cost will catch up to what our money is and we can live off money in the bank for a few years," explained Steward. So we should be able to get through 10 years without any further rate increase."
He continues, "That's kind of what we've been doing. We had put money in the bank when we were making more and the last three years we've been operating in the red."
The bottom 12 percent, according to Steward, will see no change in their monthly sewer bills. 14 percent of customers will see an increase of $2.25 per month. 15 percent of customers will see an increase of $4.50 per month. The remainder of the increase will be seen by the 60 percent of customers using over 3000 gallons per month.
Page 2 of 2 - "Please keep in mind the numbers used in calculations are subject to change in number of customers and in water consumption. The final collections will vary accordingly," he says.
Mayor David Stewart urged the council to spend the next two weeks to go over the information and discuss it with the people around town.
"We'll discuss it at the next meeting, and maybe even get the chance for anybody from the public to come up. said Stewart. "We'll discuss it again and if everybody is in favor we'll put our resolution together."
Their next meeting will be Monday, April 15, 6 p.m. in the courtroom of the Newport Municipal Building.
In other business:
- Mayor Stewart gave the February sales tax figures. The city sales tax was $105,285 up $4,908 compared to this time last year. The county sales tax was $72,527 up $8,331. The NEDC tax was $52,683 up $2,417.
- The Council approved a motion so that Stewart can enter into a loan agreement with M&P Bank for the purchase of the sanitation department's PAK RAT.
- Stewart asked that $13,960 of the money budgeted to replace the floors in city hall be redirected to repair a leak in the building's roof. The council obliged.
- The council accepted a bid from Mosquito Products LLC, of 2600 Air Base Rd. in Newport, to provide the cities mosquito control products for this year.