LINCOLN -- Lincoln City Council on Tuesday voted to increase the city's water rate by $13.50 per month for all customers to pay for a new water storage tank, estimated to cost about $4.5 million.
The rate increase is part of an ordinance approved by the City Council on Jan. 15 to amend water rates in the Lincoln Municipal Code.
New Lincoln Water Rates For the First 1,000 Gallons
City Rate: $31.90
Country: $41.54
Rural W and SE Loop: $54.52
Large User/Agricultural: $54.52
The ordinance increases the basic water rate for all groups by $13.50 for the first 1,000 gallons. The rate increase will be on bills due in either March or April.
Mayor Doug Hutchens explained that the city agreed back in 2007 to install a new water storage tank as part of its decision to use water from Benton Washington Regional Public Water Authority, commonly called Two Ton, instead of using Lincoln Lake for its water source.
"We've never done that," Hutchens said, "and it's time we do."
The water storage tank is meant as a backup if something happens with the water from Two Ton. If a problem occurs, the city of Lincoln would be out of water within four to eight hours, Hutchens said. The new tank will hold two million gallons of water.
"The major issue is the safety and well-being of our water customers," he said.
In the ideal situation, Hutchens said, the city would have initiated a small rate increase in 2007 and built up the account to pay for a water storage tank. But it didn't.
Hutchens said the decision to raise rates is not one taken lightly by the City Council. City officials and Council members have held many meetings this year to discuss the water storage tank and make plans to proceed with the project.
"We owe it to our kids and grandkids to make sure they have water in the future," he said.
The city is contracting with Crist Engineers Inc., of Little Rock, for the new elevated water storage tank and pumping station to improve the city's water distribution system. The tank will be located on two acres on the east side of North Jackson Highway.
It is purchasing the land for the tank from Thomas Lee and Gloria Jean Hunton for $50,000. The City Council approved another ordinance at its Jan. 15 meeting to authorize Hutchens to exercise an option with the Huntons to purchase the land.
Anderson Engineering Consultants has conducted a geotechnical survey of the land, and this analysis found the site suitable for a water storage tank.
In addition, the city is working with Stephens Inc., of Fayetteville and Friday, Eldredge & Clark law firm on financing for the $4.5 million storage tank. The city plans to issue up to $5 million in revenue bonds to pay for the land, tank and other associated costs with the project. The debt would be a 30-year bond issue.
Matthew Dunn, vice president with Crist, told city officials and others in a meeting on Nov. 27, 2018, that a $13.50 rate increase would bring in $379,000 per year based on a model using 2,343 customers. Dunn calculated the amount using information from more than two years of monthly water consumption reports.
A $13.50 rate increase should provide the revenue needed for the city's annual debt payment on the bond issue, Dunn said. He estimated the debt service would be about $300,000 annually or $25,000 per month and recommended the city adopt a rate increase that would bring in about $375,000 per year.
The city plans to advertise for bids in January with a tentative bid opening in mid-February.
General News on 01/23/2019