TEXARKANA, Ark. - During a meeting Tuesday, the city Board of Directors will revisit approving Texarkana Water Utilities' new annual budget, which includes a 10% rate increase, lower than the 17.75% originally proposed.
The Board tabled a vote on greenlighting the budget during its final meeting of 2020, when two outgoing directors said they would prefer the new Board to consider raising residential water and sewer rates. Then, the proposed budget included a 17.75% rate increase for Arkansas-side residents, but the budget under consideration will include a 10% increase, TWU Finance Director Jim Cornelius said Friday.
The bump would equate to an increase in the average resident's monthly bill of about $4, from $64.73 to $68.66. It would be the first rate increase for Arkansas-side residents since April 2009, when the water rate went up 20% and the sewer rate 15%.
The increase is needed to shore up TWU's cash reserves after they have been depleted by the COVID-19 crisis and three years of lower-than-usual irrigation revenues because of abundant rain. Cornelius called the 10% increase "a one-year Band-Aid" that will buy time for outside consultants to complete a rate review and make further recommendations.
Pandemic-related disruptions, including the loss of $160,000 in projected service fees when TWU suspended shutoffs last spring and summer, led credit rating agency Standard and Poor to reduce TWU's bond rating last fall. Improving the utility's cash position would begin the process of eventually recovering a better rating, Cornelius said.
The proposed budget would leave enough cash reserves by the end of Fiscal Year 2021 to cover 37 days of operating expenses. TWU prefers to keep 60 days' expenses in reserve.
No projects planned for the year would be canceled, but the lower proposed increase would mean cutting costs through savings and efficiency, Cornelius said. A new operations manager will assess staffing and eliminate overlap in job duties. Refinancing bonds issued in 2007 will save TWU $200,000 over five years.
Separate Board votes Tuesday would approve the TWU budget and amend city ordinances to reflect the new rates.
In other business, the Board will vote by consent to approve purchase of a Chevrolet Tahoe to use as a staff vehicle and to execute a depository agreement with Commercial National Bank. The Board will also take up a resolution to select an operator and award a lease agreement for the Iron Mountain Center.
The agenda includes a citizen communication time during which members of the public may address the Board on any topic for up to five minutes each.
The meeting is scheduled for 6 p.m. Tuesday at City Hall, 216 Walnut St. Anyone entering the board room must wear a protective face mask at all times.
Because of ongoing information technology problems caused by a cyberattack last month, the meeting will not be live streamed via internet.