Bentonville To See Sewer Rate Hike After Plant Closes

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Bentonville residents are set to see a major increase in their sewage bills, and some officials say the closing of a local Kraft Foods plant is partially to blame.

"Because of the nature of their processing, the nature of that business they were the single largest user of water from the city and the single largest producer of wastewater," said Bentonville Mayor, Bob McCaslin.

The Bentonville City Council voted Tuesday night to follow a recommendation presented by an engineering firm that suggested the city increase rates to help pay for the Northwest Arkansas Conservation Authority facility.

"Right now the utility is underfunded from a standpoint of being able to have enough money to pay  for future capital improvements," said City Council Member, Ryan Parks.

"Rates are always supposed to recoop all of the cost of service along with depreciation and costs of ongoing capital improvements, we had failed to meet that criteria for several years, so basically we were taking less money to operate the system," added McCaslin.

Years ago a regional plant was built to service wastewater throughout Northwest Arkansas, servicing 10 cities.  The only cities that took part were Bentonville and Tontitown. 

"Whenever the other cities decided to not participate it clearly put the burden of expense on Bentonville and Tontitown to operate the facility," said Parks.

"We ended up with 96 percent to 97 percent of the operating budget for this new regional facility," added McCaslin.

HDR Engineering presented a study to the city Monday night that would increase sewage rates by 25 percent over the next two years. HDR Engineering officials originally planned to make rate recommendations to the council in September. The firm decided to revisit rates later after a Kraft Foods plant announced in the fall it would be closing, according to documents sent to the city by HDR Engineering.

The 65,000-square-foot Kraft Foods plant employed 60 workers at the time, according to a statement from Kraft.

“Kraft is a significant user, and their announcement prompted us to revisit both water and wastewater rates,” the release states.

Kraft accounted for 5 percent of the city’s sewer revenue and 2 percent of the water revenue, according to the engineering firm’s study.

The study recommends the city increase wastewater rates by 15 percent in 2013 and 10 percent in 2014. Additional rate increases of 5 percent per year may also be needed from 2015 to 2017, the study states.

The 25-percent suggested rate increase is almost double the firm’s suggested 13 percent increase for the same time period that the firm presented to the city in 2009. At the time, HDR Engineering suggested the city increase rates 15 percent, 25 percent, 25 percent, 11 percent and 2 percent over the following five years.

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