In an Oct. 25 meeting, the board of directors voted unanimously to increase its base rate by two dollars a month -- from the current $19.50 to $21.50, beginning Dec. 1. Usage that exceeds the base rate will be charged as follows:
* $5.00 per thousand gallons for the next 4,000 gallons used
* $3.00 per thousand gallons for the next 5,000 gallons used
* $2.50 per thousand gallons for over 10,000 gallons used.
The Water Authority based its increase on a water rate analysis performed through the Rural Water Authority Assistance Program, and the Community Resource Group in Fayetteville.
The analysis, based on financial and customer billing records from 2011 and 2012, indicated that the water system operated at a net loss in 2011, and was projected to continue to experience losses in 2012 and subsequent years if no change in revenue occurs.
The analysis concluded that increases in costs of fuel, materials, maintenance, utilities and overall operations, as well as the age of the system were causing the net loss.
According to Sherri Jackson of North Arkansas Electric, which manages the Water Authority, the average customer bill will increase by $3.00 per month.
The analysis recommended that the new revenue be used to fund a capital reserve account, which will be used to pay for water system repairs and future improvements.
The rate increases will take effect during the Dec. 1 billing cycle.
The Water Authority is the second water system to raise its rates before year's end. At its November meeting, the Viola City Council voted unanimously to raise its water rates.
After hearing from Director Darrell Zimmer that the water department was approximately $1,700 in the red this year, the council decided to also raise its minimum bill by $2.00, and to add 50 cents for each addition thousand gallons used.
According to Zimmer, he has not received any negative comments on the rate increase.