Sprinkler billing error causes sticker shock

Customers running more than 5,000 gallons a month through sprinkler meters got a surprise when they saw their bills for May and June usage.

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Burrough

Interim City Manager Bill Burrough told the Hot Springs Board of Directors Tuesday night the higher-than-expected charges were the result of an error in the new rate schedule developed by the city's rate consultant, Willdan Financial Services of Plano, Texas.

The board adopted a revised rate schedule Tuesday night.

Instead of the 3-percent annual increase on every 1,000 gallons of usage in excess of 5,000 gallons, an increase of roughly 60 percent was applied. Burrough said no other rate codes were affected by the error, but the incorrect charge was included on 238 bills issued as of Tuesday.

He said affected customers will be credited on their next bill or refunded.

"We apologize for the inconvenience," Burrough told the board, explaining the problem was not brought to the city's attention until Tuesday. "I'm glad we were able to catch it in what I consider to be a very timely manner. I would suggest not paying a bill if you received it (Tuesday) and you have over 5,000 gallons of consumption.

"Let us do the recalculations. We'll either contact you or you'll see a credit on your statement for next month. If someone has had an autodraft that was a higher amount and they need a refund, they're welcome to call us and we'll take care of it."

The city's regional water system has almost 3,000 sprinkler accounts, with 1,962 of them inside the corporate limits. Water that runs through a sprinkler meter is not assessed on wastewater bills, which, per city code, uses 88 percent of metered water usage to determine wastewater charges for usage exceeding 1,000 gallons a month.

The new rate structure that took effect this year raised the minimum charge, the cost of the first 1,000 gallons of usage, on water accounts $3, or 60 percent. The city had considered applying a similar increase to the high-volume tiers for water and sprinkler accounts but opted for annual 3-percent increases instead.

The schedule attached to the November ordinance enabling the rate increase incorrectly assessed the higher-percentage on sprinkler volumes over 5,000 gallons a month, requiring an ordinance amending the November rate ordinance to be added to the agenda of the board's business meeting Tuesday night.

Increases to the minimum water charge, which will rise to $13 a month by 2021 for customers inside the city, will pay down more than $90 million of debt the city plans on issuing through 2022 to bring its 23 million-gallon average day allocation from Lake Ouachita online.

"When we were examining the Ouachita costs, we had very high increases in the volume rate," Dan Jackson, vice president of Willdan Financial Services, wrote in an email he sent Burrough Tuesday night. "This is how the high volumetric rate tiers for irrigation were calculated.

"You and the city later decided you wanted the cost of Ouachita to be borne in the base charge with minimal volume rate increases. I did this and reset all the customer class volume rates back to 3 percent. Except it looks like I missed the higher tiers of the irrigation rates, and I inadvertently left the higher volume increases in."

City Attorney Brian Albright told the board the ordinance it adopted Tuesday night amending the November rate ordinance will not affect the bond issue the board authorized in April. Revenue generated from ratepayers is pledged toward the repayment of the more than $20 million in bond proceeds the city received last month, but Albright said the security for the April debt issue is based on 2017 base-rate revenues.

"I called the bond counsel, and the good news is the bond issue in April was based on 2017 revenues," he said. "It was not based on projected revenues of 2018 and is limited to the minimum rates, not the additional monthly usage charge."

Local on 07/19/2018

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