(Part 1 of 2)
By Ethan Nahté
The walls of Mena City Hall were practically bursting at the seams with the number of Polk and LeFlore County residents filling the chamber, lobby and any other space they could manage to stand the evening of Jan. 10 for a public hearing regarding the suggested rise in water rates. The hearing occurred prior to the regular monthly city council meeting, allowing residents and representatives for the City, Mena Water Utilities and Hawkins-Weir Engineers, Inc. to discuss issues and purpose for the rate increase.
The Mena City Council did approve amending Ordinance No. 2336-21, declaring an emergency; and prescribing other matters relating thereto, thus creating the new Ordinance No. 2369-23.
In addition to individual citizens, opponents included representatives of rural water utilities Freedom Water and LeFlore County Rural Water District, as well as Arkansas State Parks. There was no one representing Acorn Rural Water Association.
Mayor Seth Smith addressed the noisy crowd, saying, “First and foremost, I understand there’s a lot of passionate people about the rates proposal. I will tell you up front, we’re all adults and we’re going to act like adults. If you are unable to act like an adult, I will kindly ask you to right now. If at any point during the meeting somebody wants to get carried away, get loud or yelling, you will be removed from this building.”
Smith then turned the meeting over to Mena Water Utilities General Manager James Looney, who stood at the doorway to the council chamber in an attempt to be heard by those people in both rooms.
Looney said, “We’re a non-profit. The rates we’re proposing are to improve the water utility system so we can continue to provide water to the public. These rates are not something any of us wanted to do. The rate increases are substantial for everyone, for all rate classes. These rate increases affect our families. They affect those that we go to church with, those we go to ball games with, those we go to lunch with, those that we work with. This affects everybody across the board and no one single rate class is singled out to pay a large increase.
“The water plant has received a letter of deficiency from the [Arkansas] Department of Health. We are required to fix that deficiency. This will result basically in a large remodel of the Iron Forks plant.”
The ADH Public Water System Compliance Summary states: If the ADH identifies a significant deficiency during a survey, or at any other time, corrective actions must be taken. Corrective action alternatives include one or more of the following:
1) Correct all significant deficiencies
2) Provide an alternate source of water
3) Eliminate the source of contamination
4) Provide treatment that reliably achieves 4-log inactivation and/or removal of viruses Corrective actions are to be discussed with and receive approval of ADH before undertaking any action.
Looney said, “Engineering is complete for this project and we’re trying to take this to bid in February.
“We’re under two consent orders from the Arkansas Department of Environmental Quality. This only involves those who have sewer with the City. One is for the plant, and this will require a brand-new treatment plant as well. So, we’re building two new treatment plants. Engineering is under way. The existing wastewater plant is not adequate to maintain our treatment standards. There are parts of the levy built a long time ago that have car bodies and other things in it. There are concerns those levies could fail and that’s the reason we’re having to do this.”
In the Wastewater Treatment Plant Master Plan (WWTP) on ADEQ’s site, dated August 21, 2019, part of the conclusion and recommendations read:
“The City of Mena’s existing WWTP requires repairs and process modifications to consistently comply with NPDES permit requirements and meet the City’s future wastewater needs. Without capital improvements and process modifications, permit exceedances will continue indefinitely. Additionally, the City will be unable to comply with future permit limits for nutrient removal.”
Looney said, “We’re also under a consent order from ADEQ on our sewer collection system. We get a lot of water in the plant that’s rainwater that seeps into the pipes through cracks and breaks and things. We have to address that now to avoid any further fine or penalties. We haven’t received any so far.
“In addition to these,” Looney said, “Arkansas legislature has passed ‘Act 605’ which covers a lot of different things, but specifically requires a water utility conduct a rate study every five years and specify what must be done a year before any project is to begin. The rate study must be done by an outside company.”
In this case, the approved company is Hawkins-Weir that conducted the rate study. They had to meet the requirements of the American Water Works Association.
Looney said, “It has to ensure that the rates established are sufficient to pay for the financing of the projects. Without this rate study being done and implemented, we will not receive any funding for the projects… . The only obstacle is the approval of the rate increases. The rate increases are proposed to take affect July 1, [2023].”
Looney said, “We hope there are some of the ARPA funds left over and we can decrease the cost of the loan. If we can reduce the cost of the loan, we can look at the water rates and reduce the water rates accordingly.”
The water associations and Hawkins-Weir were unlimited on their time to talk. Other citizens were allowed two minutes to talk or ask questions directly to Looney or Hawkins-Weir.
Freedom Water Board President John Davenport said, “I was instrumental in starting that endeavor back in the late ‘80s. I’ve been on the board now for a little over 34 years. That doesn’t qualify me as a rate study expert, but I did spend 35 years at U.S. Motors and the majority of that career was spent in product costing. The last 15 years, I was the cost control manager and I was responsible for developing cost rates and implementing those for all of U.S. motors product lines.
“In early November of last year, Acorn, Freedom and LeFlore County water associations were notified by Mena Water Utilities of a rate increase that would be effective on January 1, 2023. That rate increase will take the current wholesale rate of $3.15 per thousand gallons of water to $6.50 per thousand gallons of water, an increase of 106%. Representatives for all three regions attended the regular meeting of the Mena Water Commission to express their concerns.”
Davenport reviewed the approved Hawkins-Weir rate study. He said, “It became readily apparent to me that a generalized allocation methodology applied across the sum of the utility expenses and liabilities were used to arrive at the so-called wholesale rate. The authors of the rate study calculated the ratio of 57% city, 43% wholesale based on water sold to each [group] respectively. That was for water sold, not necessarily produced. This allocation was then applied to the sum of all liability and expenses without a line-item investigation as to the applicability of each line item to the wholesale user rate.
“I did not perform a full investigation of the entire rate study, primarily because as soon as I realized the allocation flaw, it was my opinion that this rate study was not valid.”
Davenport sent the mayor and Looney his findings and requested an audience. He said the meeting never occurred due to scheduling difficulties. His document was forwarded by Looney to Hawkins-Weir.
Mena Water Commission held a special meeting on Dec. 13, 2022, and reviewed fa revised study from Hawkins-Weir with four alternatives.
Davenport said, “That revision was a direct result of Mr. Looney forwarding my document. Some of my findings were accepted, while others were not. In my opinion, there are other challenges to the rate study that I did not document. The commission went on to adopt Alternative 3 from the revised rate study, which did lower the wholesale rate from the initial $6.50 per thousand to $5.20 per thousand gallons.”
That would be a $1300 per thousand gallons difference.
“It’s still a 65% increase to the rural water association… . Mayor Smith, members of the council, this evening you will be asked to adopt a water rate proposal, that in the opinions of myself, the boards of Acorn, Freedom and LeFlore County water associations, that is flawed, biased and discriminatory.”
Davenport went on to give an example with a hypothetical set of numbers based on the actual rates that showed a vast difference of over $7,400 for the usage of 5 million gallons of water between one customer within city limits and Freedom on the same water line, paying more, located just outside the city limits.
“How can this not be viewed as discriminatory, based on where you live and who you are?” Davenport asked.
Davenport went on to provide other examples. On behalf of the three water associations, he proposed the council vote nay on the rate increase, receiving a round of applause from several members of the audience.
John Butler of Big Cedar, Oklahoma, was one of two representatives for rural water district 17 in LeFlore County. Additionally, he was the district’s first water operator (2001-2003) and returned as operator in 2022. Butler is also the minister of the Big Cedar Freewill Baptist Church and the minister and chairman of Christ Food Center, one of the few emergency food pantries left in southern LeFlore County.
Butler said, “These positions give me a very unique perspective into the people of our valley. Many must choose between medicine and food every month because they don’t have the money for both… .”
Butler believes that the rate increases will force many of the Big Cedar residents to revert back to ancestral wells, ponds or streams, which have reportedly been the cause of illnesses, including cancer. “Once again, they will face health issues using contaminated waters,” Butler said.
He stated the water line for their community was put in so poorly 22 years ago that after trying to fix leaks, it averages a 50% water loss on a monthly basis.
“Our customers struggle to bear that burden at our existing rates,” Butler said. “Our current water board has designed a six-year plan to replace the existing water line and make the water more affordable.
“There are signs of the beginning of growth in that valley. Your rates will stop that. Our area will no longer be attractive to new growth when a few miles west, land will be costing the same but the water over there will be affordable. Without new customers, our community’s hope for growth will evaporate.
“Very few of our existing customers will be able to pay the cost of this outrageous rate hike that Mena Water Utilities is proposing. We are a retirement community with the majority of our community living on fixed incomes. If you raise our rates as proposed, you will devastate our community. This rate increase is unfair for everyone in our community.”
He was not seeking special treatment, but suggested the increase be placed on hold and that another study be done, possibly by the Arkansas Rural Water Association.
Looney said after the meeting, “We can change the rate at any time, but what I have to do is maintain that bottom line figure of $3.3 million to pay those bonds.”
The American Rescue Plan Act (ARPA) grants for Mena, totaling $5 million for the Iron Forks Water Treatment Plant and the other for $5 million for the Mena Wastewater Treatment Plant improvements (see Pulse, Dec. 14, 2022) are projected to cost a total of $31.6 million. The ARPA grants were the maximum that could be received.
Looney said they have to start spending on those relatively soon. He did not have the deadline dates readily available. “In the application, we have to state what these funds are for. There’s a deficiency according to the Arkansas Department of Health, which solidifies that we need these projects need to happen… somebody who doesn’t have a situation as serious as ours is may only get $2 million. We got the $5 million for the wastewater and the sewer side. I think that speaks volumes for the importance it is to get this project done.”
“Before I got here, there was an agreement with the Water Utilities about the Letter of Deficiency and how to fix the clear well.” Again, Looney did not have the information readily available, but said if he remembered right, the clear well either had to be fixed by 2025 or at least started by 2025. The rates don’t have to be implemented—I have sometime this year to implement the rates—but they have to be passed before we can go bid. We’re trying to get ready so we can go bid on those projects now and move this project along and get started on it. That’s why we went ahead and passed this. We’re on a big push because of the agreement timeline. We’re having a lot of communication with the Arkansas Department of Environmental Quality (ADEQ) on getting this sewer plant done.”
We will have more in next week’s issue, including comments by Hawkins-Weir, as well as more from Arkansas State Parks, former JP Terry Terrell, Looney, and the public. WE will also have more on what the council discussed before approving the new ordinance by a vote of 4-1, and an ordinance relating to the sewer facilities.
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