Nevada County Picayune and Gurdon Times Newspaper Archive

Gurdon Sewer Rates Forced Up

In a dual meeting the Gurdon City Council and Gurdon Water and Sewer Commission agreed to go ahead with a proposed sewer rate increase.

It wasn't like either group had any choice as the Arkansas Department of Environmental Quality is requiring it.

Kathy Coston, with the ADEQ, said there are two components to the sewer charges, debt service and maintenance, operation and replacement.

It was in the second area the Gurdon Water and Sewer Department fell short.

Generally, she said, cities are expected to raise these rates every two or three years, and it's been longer since Gurdon has had such an increase. The rate hikes are needed to meet rising prices of equipment.

According to the annual audit of the Gurdon Water and Sewer Department, she said, the shortfall is about $47,000. But, she added, this doesn't mean the department didn't have enough money to operate properly, only it didn't have as much as the ADEQ felt it needed.

Earlier reports were the minimum sewer bill wouldn't be affected by the rate hike, she said, but this is not the case. In fact, the minimum bill will be increased by 80 cents, going from $14.45 per month to 15.25.

The increase on water used in excess of 1,000 gallons per month will be in effect as well, once the rate hike has been put into effect.

Coston told of the formula used by the ADEQ to figure what a department needs in order to have enough funds on hand.

She said the ADEQ first looks at the operating expenses for the sewer system in question, less the depreciation. This was then multiplied by the volume used.

Gurdon, she said, needed to have $141,827, but, under the formula, only had $94,516.

Coston told the council and commission Gurdon isn't the first city in the state to be required to raise its sewer rates this year.

"It's a difficult process, but a regular event," she said.

Harold Hurst, manager of the department, said the department does have money in the bank which is placed in certificates of deposit. He was unable to tell how much the CDs were worth because they have different interest rates depending on the length of the term for the CDs and when they were purchased.

Coston said the increase needs to be put into effect as soon as possible, but the council must first pass an ordinance before this could be done.

Lillian Scott, also with the ADEQ, said not raising the rates would mean the city isn't living up to its contractual agreement and this would affect the city's reputation.

Coston said Gurdon agreed to examine its sewer rates annually and raise them as needed, but this hasn't been done.

A lot of cities, she said, pass sales and use taxes to fund their sewer system, but the economy of the area made this unfeasible for Gurdon.

The city, then, had to pass a bond issue to fund the sewer project in 1991. The bonds will be paid off by 2013, Hurst said, unless something happens and they can be paid off sooner.

The ADEQ loan, Coston told the two groups, had an interest rate of 3.5 percent for the $2.1 million borrowed.

Hurst said the commission had already approved the rate increase, which left it up to the council to follow and make it official.

Before an ordinance to raise sewer rates can be passed, it must be prepared by a bond attorney, then passed on to the ADEQ for approval before the council gets a final vote.

In other business with the commission, the council followed Hurst's recommendation of new six-year terms for commission members Jim Hatley and Don Morehead.

The commission then adjourned to the Water Department office for the rest of its meeting.

This included opening bids for a new backhoe. There were four bids, from Capitol Ford in North Little Rock, John Deere Warrior of Camden, Case of Mabelvale and Cat Rigs of Little Rock.

The commission picked the John Deere because it's easier to find parts and keep this brand of equipment maintained.

The backhoe will cost $54,200.

In addition, Hurst is having new maps drawn up showing where everything is in the city's water and sewer systems.

This is being done to provide an accurate record of where water and sewer lines are in the future.

BB&B Construction has looked at the lift station on Miller Street and plans to start work on it in July.