Earle tables proposed water rate hike
Council wants to crunch more numbers before any increase
Faced with a looming financial crisis at the water department, Earle city council decided to postpone a decision on whether to seek a possible five dollar water rate increase until they can get more information about how long it would have to stay in effect in order to get the debt paid off.
“I don’t want to vote tonight,” said Councilman Tyrome Hurst.
The water department owes the city $80,722 and won’t be able to catch up unless the city approves a rate hike.
Water department officials told the council that they believe it will take them about three years to catch up if the five dollar increase is approved.
“We’re shooting for 36 months,” water commissioner George Stein said. “I hope we can do it sooner.”
The water department has seen its fortunes decline since the 2008 tornado.
Water accounts have declined from 820 customers in March 2008 to 626 in March 2017, and revenue has dropped from $868,000 in 2008 to $618,000 in 2016.
Money from water accounts is paid to the city and goes in to separate funds for a water tank loan, school water line, yard waste fund, mosquito control fund, and garbage fund. The water department was almost caught up, but fell behind on its payments when it needed to replace a tractor and purchase a new pick up and flush truck.
The city hasn’t had a rate increase in over 20 years.
Clark told the council that the current rates are not enough to cover expenses any more and without the rate increase the situation will only get worse.
“I don’t want to spread gloom and doom,” Clark said. “But we are going to have to ante up on this. If we don’t do this, the state is going to come in and set it for us.”
Clark said they had discussed asking for a ten dollar increase — which would get them caught up in a year — but decided that the citizens couldn’t afford that.
“I didn’t want to come here and ask for ten dollars,” Clark said. “ I didn’t think you would go for it.
That’s a lot of money — especially for a town that is 80 percent in poverty.
“You thought right,” said Mayor Sherman Smith.
“That’s a lot.”
Councilman Kenneth Cross asked whether they could get caught up if the council agrees to the hike.
“Can you do it in 36 months?” Cross said.
Stein said be believes they can — barring any unforeseen major breakdowns in the water system.
“We don’t know what kind of expenses we will have looking forward,” Stein said. “So we can’t say an exact number. But if we don’t have any big bills, I think we probably can.”
Smith said putting an expiration on the rate increase of three years isn’t realistic. He would rather the department ask what they need for now instead of having to come back in three years and asking for another increase.
“I’m trying to be realistic,” Smith said. “You’re already behind. And you have to operate. And you are barely operating. So how are you going to retire this in three years? If you cut it off you’re going to be back where you are. I don’t think you’re benefiting anybody by cutting it off.”
Although the water department has money in several certificate of deposits, Smith said cashing in $15,000 CD won’t be enough for emergencies.
Clark said doing nothing is not an option because the state will come in and set the rates for them.
“I would rather get a little bit now,” Clark said. “We can always come back for more later.”
Clark called on the council to pass the rate increase request by a unanimous vote.
“The longer we wait the worse it gets,” Clark said.
Councilman Jesse Selvey said he is opposed to the rate increase.
“Every one I talked to in the ward I represent don’t want the raise,” Selvy said.
“Have you asked them if they want water?” Clark responded.
Councilman Bobby Luckett agreed with Hurst about delaying the vote and asked Clark to come back with some more information about how long it will take to get the accounts current.
“You might to look at it,” Luckett said.
Councilman Robert Malone, who is in favor of the rate increase, said the city needs to act.
“We need to do whatever it takes to keep our city going,” Malone said. “So if you need five dollars — say five dollars. It will do what it has got to do. And don’t put a sunset on it because you don’t know (what will happen).”
The council voted to table the proposed rate hike.
Malone, Cross, Councilwoman Jimmie Barham and Charlie Young voted against waiting.
By Mark Randall