LOGAN COUNTY, Arkansas — Three Arkansas cities have filed a lawsuit against the City of Booneville for increasing their water rates, which is "approximately three times the current rate, which is extreme and unjustified," the plaintiffs claim.
The plaintiffs in the suit filed on June 11 include the cities of Ratcliff, Magazine, and Blue Mountain as well as the Milltown-Washburn Public Water Authority and the South Logan County Public Water Facilities Board.
According to court documents, the plaintiffs are in some form of water purchase contracts with Booneville.
- Ratcliff entered its contract in 1981
- Magazine entered its contract in 1979, while Blue Mountain purchases its water from Magazine
- Milltown-Washburn Public Water Authority entered its contract in 1986
- South Logan County Public Water Facilities Board entered its contract in 1996
In February, the lawsuit states Booneville notified each contract holder of its intention to impose a rate increase from $1.50 to $4.30 per thousand gallons of water starting June 1, 2024, with rates beginning June 1, 2025, to be further raised to $6.45 per thousand gallons of water.
According to the contract provided in the lawsuit, the water rates could be modified yearly.
"Any increase or decrease in rates shall be based on demonstrable increase or decrease in the costs of performance hereunder, but such costs shall not include increase capitalization of the Seller's system," the contract said.
For the latest increase proposal, the plaintiffs said they requested the basis of the cost increase. Booneville then reportedly provided them with an Arkansas Rural Water Association study from July 31, 2023.
The plaintiff alleges this study does not support the rate increase. Therefore, court documents say Booneville "failed to prove that the rate increase is justified as required by the contract." They also accuse the City of Booneville of factoring capitalization costs into the increased rate, which also allegedly violates the water purchase contract.
According to court documents, the plaintiffs have set up a meeting with Booneville to discuss the basis for the water increase on June 18. Despite this meeting set to happen in mid-June, the lawsuit says Booneville still decided to carry out the rate increase on June 1.
The plaintiffs are requesting a temporary injunction from the court for the following reasons:
- The plaintiffs claim the rate increase is "approximately three times the current rate which is extreme and unjustified."
- The increased rate was imposed in the middle of a fiscal year.
- They say they have not budgeted for the "extreme increase" because they were not "advised earlier."
- This change will also impact their individual customers, which they have not planned for.
- According to the lawsuit, Booneville has "threatened to impose a 10% penalty on any of the increased funds/rates not paid by plaintiffs."
- The plaintiffs claim the charges are beyond their means to financially fund and support.
- They also claim the rates imposed by Booneville exceed what was suggested in the study.
5NEWS has reached out to Booneville Mayor Edgar Baker for comment.
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