Van Buren Public Water System Rate Increases UPDATE August 1, 2024
August 01, 2024
City of Van Buren Public Water System Rate effective August 1, 2024
Message from the City of Fort Smith:
WATER RATE INCREASE EFFECTIVE TODAY
A water rate increase approved by the City of Fort Smith Board of Directors on July 11, 2024, becomes effective today. Customers will begin seeing the increase on their September bills. The increase will cover operating and maintenance costs, help pay off existing debt, and meet the required debt coverage to comply with bond agreements.
Message from the City of Van Buren Municipal Utilities:
Like the majority of water systems in the area, the City of Van Buren purchases treated water from the City of Fort Smith. Van Buren purchases an average of 4.8 million gallons per day. Pursuant to the 1983 Agreement between the two cities, Van Buren should only be allocated costs associated with the Impoundment, Treatment, and Transmission of water delivered to Van Buren, and should not pay for costs associated with the City of Fort Smith Water Distribution System or Sewer System. The rate increases effective today, August 1, 2024, will increase Van Buren's cost of purchasing water by approximately $2.5 million dollars per year, or around 75%, increasing the monthly charge to Van Buren's Average Residential Water User (4,000 gallons) by about $8.30. There will likely also be an increase in the cost of purchasing water from Fort Smith sometime in 2025. The cost of purchasing water has not increased since 2011. Significant increases in the costs of treating water since 2011, and the need for upgrading the Water Treatment Plant and aging Water Transmission Line are primary drivers of these increases.
Van Buren Residential Sanitation Agreement: The existing Agreement between Van Buren and Waste Management of Arkansas will expire on December 31, 2024. In June the program was advertised for competitive bids. Three bids were received for Automated Collection utilizing Contractor provided carts for both Solid Waste (garbage) and Recycling Collection. NO bids were received for a traditional Manual Collection system. The Residential Sanitation Agreement was awarded to the low bidder, CARDS River Valley, beginning January 1, 2025. Information regarding the program and the transition process will be published in the near future and will include mail notifications with Van Buren Municipal Utility Bills.
Click here to view the City of Van Buren Average Residential Municipal Utilities Bill Summary (the summary will be mailed with August Bills).
City of Van Buren Public Water and Sewer System Rate Increases effective April 1, 2024
Arkansas Act 605 of 2021 for the Oversight of Retail Water Providers requires and establishes specific criteria for periodic rate studies "based on the guidelines of the American Water Works Association and the Water Environment Federation" and that "Rate Studies performed shall be an objective and unbiased review of the provider's fiscal status."
The Rate Studies shall include: Reports containing the following information for the current year and projections for the next five years:
- A comprehensive cost analysis, including:
- Operations and maintenance (O&M) expenses;
- Financing expenses, including but not limited to debt service payments, bond issuance costs, and commercial paper fees, if applicable;
- Any required cash reserves unavailable to pay for expenses, including but not limited to the annual refurbishment and replacement account deposit requirement as set out in Ark. Code Ann. § 14-234-802(e);
- Depreciation expenses;
- Future capital expenses;
- Expenses required for an annual audit or agreed-upon procedures and compilation report;
- Expenses required for rate studies required under Code Ann. § 14-234-802; and
- Any other expenses not accounted for in paragraphs (a) through (g).
The new code tasks the Arkansas Natural Resources Commission with the oversight of the studies and specifies that "The Commission will maintain a list of approved entities to conduct rate studies as required." " Furthermore; the Act 605 lists criteria that can result in a provider being placed in "Fiscal Distress" for failing to comply with the requirements of the rate study, training, and other requirements, possibly leading to further studies and actions.
The City of Van Buren Municipal Utilities has been working with Hawkins-Weir Engineers, Inc. (an "approved entity") to complete a comprehensive, Act 605 compliant Rate Study, which includes a five (5) year projected Capital Improvement Program of around $15 Million Dollars for needed Public Water System improvements and around $19 Million Dollars in needed Public Sewer System improvements.
Effective for services billed on or after April 1, 2024, the cost of Van Buren water and sewer for the average residential user at 4,000 gallons (the national average usage for calculating rate increase percentage) will increase by approximately 30% (Consumer Price Index increase since last rate increase in 2016 was approximately 26%), from approximately $49.39 to: around $64.28 for the average monthly bill, or approximately $2.11 per day for water and sewer services.
Residents using more than the average 4,000 gallons, Commercial, and Industrial user's cost of service will increase by approximately 40% to 60% based on the amount of water/sewer used. This water rate increase does not include the increased cost of water purchased from the City of Fort Smith expected to be implemented in the near future.
Click on the links below to view/download a pdf file of the information.
Van Buren Water Rate Ordinance 06-2024
Van Buren Water Rate Resolution July 2024
Van Buren Sewer Rate Ordinance 07-2024
Rules Implementing Arkansas Act 605 of 2021
Van Buren 2024 Water and Sewer Rate Increase Pamphlet
Van Buren Residential Water and Sewer Rate Increase 2024 Summary
