A months-long rate study has been completed and the findings presented to the El Dorado City Council, who now must consider an ordinance that would carry out recommendations for the El Dorado Water Utilities to improve, operate and maintain the city’s water/wastewater system.
That consideration will largely entail a public education campaign to help citizens understand the state of the city’s aging water/wastewater infrastructure and why a rate increase is needed to generate additional revenue to help address ongoing maintenance and capital improvement projects.
The study was conducted by Raftelis, a utility and public-sector consulting firm that focuses on finance, organization and technology, including water and wastewater rate studies, cost analyses and financial and strategic planning.
The study was covered by the El Dorado Works tax, a 1-cent city sales tax that is earmarked for economic development, municipal infrastructure and quality-of-life projects.
In 2019, Robert Edmonds, director of public works, presented an $80,000 funding request to the El Dorado Works Board, who administers the tax, and the El Dorado City Council to pay for the rate study.
Edmonds asked that the money be reallocated from a project to relocate a water main on U.S. 82, just west of town.
The project came in nearly $700,000 under its estimated $1.9 million budget, which also came from the El Dorado Works tax, and the city council and works board agreed to direct $80,000 from the remaining funds toward the EWU budget for a comprehensive rate study.
Raftelis won the contract for the study and got to work late last spring.
On Jan. 23, Rocky Craley and Seth Garrison, both senior managers of Raftelis, presented the results of the study to city council members.
Garrison provided some basic data for the EWU, telling council members that the utility serves 10,400 customer accounts with a total population of 20,000 - 25,000.
Of 63 EWU employees, 38 are directly involved in operating and maintaining the collection and distribution system.
“You have a fairly large distribution system for your size,” Garrison said.
He then pointed to major capital improvement projects that are sorely needed for the utilities, cautioning council members that the city’s two wastewater treatment plants, both of which were built in the late 1970s, have far outlived their useful lives.
“Most of the plants across the country that vintage have already been replaced and refurbished once or twice,” Garrison said. “If you don’t repair them, bad things are going to start happening. You’re going to have failures, compliance issues, could have fines…”
He said state and federal environmental regulatory agencies “have come down” on many communities for not tending to necessary repairs of water and wastewater systems.
Estimated rehabilitation costs for the WWTPs vary between $19 - $40 million and Garrison explained that the EWU has avoided more expensive repairs by building the 26-mile, multi-user wastewater pipeline to the Ouachita River.
The line got up and running in 2013 and serves the EWU and several local industries. The line is owned and operated by the water utilities and the industry partners share O&M costs.
The pipeline ferries treated wastewater to the river, rather than smaller creeks and steams that come with stricter environmental discharge limits.
Raftelis also recommended that the EWU ramp up replacement and repairs of water and wastewater pipelines, many of which are several decades old.
With 400 miles of water lines and 200 miles of wastewater lines, Raftelis proposed that the EWU replace between four and six miles of pipe each year.
Garrison pointed out that the EWU experiences a significant number of water line failures and leaks per year, noting that up to 70 percent of the leaks are fixed with temporary clamps.
Integrating more technology into the EWU’s O&M plan would help with system improvements and improve efficiency among personnel, Garrison reported.
For instance, Raftelis recommended that the EWU step up automation at its water wells, a move that could create opportunities for the five staff members who work in water production and treatment to be redirected to other areas of EWU operations.
Garrison also cited the need for a full-time engineering/technical group made up of about two or three people.
EWU engineering consultant Lorraine Murtha was the EWU’s first in-house engineer who came aboard more than a decade ago before later moving to a part-time role.
Recommended rate increase
Craley presented the financial analysis for the study, telling city officials that the EWU will likely have to look to a bond issue for the major WWTP rehab because the EWU is not recovering enough revenue from wastewater rates to cover wastewater operations.
“Our goal was for water (revenue) to pay for water and wastewater (revenue) to pay for wastewater,” Craley said.
To meet the goals and objectives that are outlined in the study, Raftelis recommended an annual 2 percent increase on the water side and 12 percent on the wastewater side.
The average EWU customer would see a 7 percent increase on their monthly bill, Craley explained.
Councilmember Michael Rice expressed concern for low-income customers who must choose between paying “for their prescriptions or their water bill.”
“To someone who’s living off $500 a month, 7 percent a year sounds great but to them, that’s big money,” Rice said.
Councilmember Willie McGhee said that while he does not favor raising EWU rates, “Our citizens need to know that we have to do something and we’re trying to make it as easy as possible but we also want to be good stewards of taxpayers’ money.”
The financial outlook presented by Craley covers the next 10 years but he and Murtha said re-assessing the situation within three years will provide a clearer picture for the next decade.
Murtha also said she is looking to design and bid the WWTP project this year and begin construction in 2021.
Edmonds and Murtha presented council members with a proposed ordinance for a water rate increase that would go into effect May 1.
City officials agreed to review the proposal and discuss it at the next regular council meeting Feb. 6.