In 30 seconds
- Arkansas Rural Water CEO Dennis Sternberg told the council Helena-West Helena lost 73.5 percent of its treated water in 2023, selling 378 million gallons against 1.428 billion gallons pumped.
- Sternberg recommended raising the marginal water rate from $2.73 to $5.06 per thousand gallons in year one and to $7.39 in year two, with the sewer rate rising immediately to $2.82 per thousand gallons.
- City Attorney Andre Valley said a Department of Health consent order carries about $750,000 in fines, with roughly $450,000 still outstanding, all waivable if the city hires an engineer and licensed water operators within 90 days.
- State officials in Little Rock told the city it needs a $100,000 general manager and two $50,000 licensed operators, one for each water system, to meet that deadline.
- The council voted to authorize eminent domain against the Boys & Girls Club for a 900-square-foot well-site tract after the club offered to sell it for $25,000, and scheduled the public hearing on the rate ordinances for July 23; the hearing took place July 24.
- Mayor Christopher Franklin urged immediate action, warning the city would be back in the same crisis without new rates and contractors on the ground.
Recap
Water loss and the rate study's headline finding
Arkansas Rural Water CEO Dennis Sternberg told the council his review of 2023 data found the city produced 1.428 billion gallons of water but billed customers for only 378 million gallons, a 73.5 percent loss rate . Sternberg opened by identifying himself and noting the study now folds in a 2023 emergency loan the city took out on the water system .
Debt-service ratio and the new rate schedule
Before any increase, the water fund's debt-service coverage ratio was negative 2.74, short of the state's 1.1 minimum; the recommended rates would push it to 1.577 . The plan phases the water rate over two years: the marginal charge above the minimum bill rises from $2.73 to $5.06 per thousand gallons the first year and to $7.39 the second, while the sewer rate rises immediately to $2.82 per thousand .
Consent order fines and a 90-day staffing deadline
City Attorney Andre Valley told the council the Department of Health's consent administrative order sets a 90-day deadline to hire an engineer and get licensed operators in place, and carries about $750,000 in proposed fines, with roughly $450,000 still outstanding; all of it is waivable if the city complies . The state requires West Helena to hold a distribution-level 2 license and a wastewater-level 3 license .
Little Rock's staffing demand: $100,000 manager, two $50,000 operators
City officials told the council that state representatives in Little Rock require a $100,000 general manager and two licensed operators at $50,000 each, one for each water system . Mayor Christopher Franklin later repeated the same figures, saying the $100,000 request came directly from the state and that the city is already paying more than that to cover the gap .
Miller presses for vetting and raises an equity concern
Councilwoman Maxine Miller confirmed the new water rate nearly triples the marginal charge, from $2.73 to $7.39 per thousand gallons, and asked whether customers with undetected leaks would be held responsible for the higher bills . She later pressed for full vetting of the new hires, saying the city has been paying big salaries for these positions and needs people who are actually qualified and licensed .
Eminent domain authorized for a well-site tract
City Attorney Andre Valley told the council the Boys & Girls Club offered to sell a 900-square-foot tract needed for a new well for $25,000, plus a water-bill adjustment and field maintenance, which works out to about $1.2 million an acre . The council voted 4-0 to authorize eminent domain proceedings while the mayor continues to negotiate .
Public hearing set for July 23, consent orders acknowledged
Dennis Sternberg told the council state law requires a public hearing before the sewer rate ordinance can pass , and city staff set that hearing, along with the rate ordinance, for July 23 . The council then adopted a resolution acknowledging the four state consent administrative orders covering water, the landfill, and public health .
Franklin's appeal: act now, raise rates, hold listening sessions
Mayor Christopher Franklin told the council the city has kicked the can down the road and needs to raise rates and get contractors working immediately, saying he would rather go down fighting the problem than fail to act in his re-election year . He committed to holding public listening sessions or a town hall to explain the increase , and closed by telling the council the decision has to be made together, pointing to his own mother's fixed income .
Transcript
Auto-generated from the meeting video's captions and lightly cleaned for readability — wording is kept as spoken, not corrected, except that caption-garbled names of city officials are normalized against the roster. Speaker names follow the attribution work in our governance record; a ° marks a name our reviewers have not yet verified. Every timestamp plays the city's video from that moment. Watch the full meeting ↗
0:02
All present Our father who art in heaven, hallowed be thy name. Thy kingdom come, thy will be done on earth as it is in heaven. Give us this day our daily bread and forgive our trespasses as we forgive those who trespass against us. Lead us not into temptation, but deliver us from evil. For thine is the kingdom, the power, and the glory forever. Amen. I pledge allegiance to the flag of the United States of America and to the republic for which it stands, one nation under God, indivisible, with liberty and justice for all.
0:46
Roll call Roll call (attendance) — present: Maxine Miller, Dr. Kyle Miller, Don Etherly, Monica Davis. Absent: Latoya Harris, Joe St. Columbia.
1:06
Unidentified Good evening, ladies and gentlemen, and Mr. Mayor and Madam Clerk. Uh we're here tonight for a regular council meeting. The singular agenda item is the water rate study and we have the CEO of Arkansas Rural Water, Mr. Dennis Sternberg, and his assistant, Mr. Chris Harris, and they're going to present the rate study and uh entertain any questions you may have about the rate study. Um and one of the things I want to say before they come is of course we're required in 2026 to do a rate study uh to comply with Act 605, but we're doing this one now and I suggest we do one next year and and try to make it an annual thing uh because you're going to hear in the rate study presentation there's some soft spots we have with our water department in which we need to kind of tighten those up. At this time we'd ask Mr. Sternberg Harris or both to come forward. They got um the rate study he's going to present to you. I sent you the draft that I had marked up. Um but he'll give you one that's not marked up.
2:24
Dennis Sternberg (Arkansas Rural Water)° All right. Yeah, this is the second Look. I'll wait a minute.
2:49
Unidentified What's the difference between that and the other year?
2:59
Dennis Sternberg (Arkansas Rural Water) This is actually nothing. I only made one change, but I wanted to go over First of all, again, my name is Dennis Sternberg with Arkansas Rural Water. You're getting an updated handout on the rate study. Uh we made a change in talking with Arkansas Natural Resources. Uh you guys had actually done an emergency loan back in 2023 on the water system, and I just went ahead and included that in. Uh so, that'll be the only significant change for the rate study from the original one I'd done and talked with the mayor about it at the time. Uh One of the things we look at when we do a rate study under Act 605 as Chief of Staff has mentioned, it requires any city that has water and sewer and does one audit to look at both water and wastewater. And do a rate on that itself. With that, we asked the city to provide us the the raw data to run the numbers. Be able to run the numbers and we look at a total year. Uh January 1st through December 31st of a of a year. I think it was 2023 we looked at, the latest year. Uh this this rate study has been done in compliance with Arkansas Natural Resources and Act 605. Uh we used to do a very simple rate study, but Act 605 has changed a lot of things. One of the things that's changed is you have to have it done by a rate study approved rate study provider. Arkansas Rural Water is one of the approved rate study providers in the state. You can go to Arkansas Natural Resources Commission and look at their website and they'll have a list of approved rate study providers. It varies, there's probably about 30 or more on there. It's from engineers, CPAs, technical systems providers like us, community uh unlimited, different ones are on there. And you can select whoever you want. The other thing is when you look at the rate study, you have to also meet a debt service coverage ratio of a 1.1. You also have to fund a refurbishment and replacement account. So you'll hear a lot about the debt service coverage ratio, the refurbishment and replacement account as we go through this. But I asked Mr. Turner to provide us the numbers. He provided us the numbers for the year to look at and with that we started doing our calculations. The first page, and you'll see this dated July the 2nd, 2024. Uh City of Helena-West Helena, Arkansas Water and Sewer Utilities, uh Arkansas Rural Water Association reference Arc Water Rates and Water Rate and Sewer Study based on 2022 year reports. It wasn't 2023. Meeting the rules of Act 605 of 2021. When they passed the law, they gave the authority to Arkansas Natural Resources to be the one to enforce the act. They said a set of rules to go by and everybody has to comply. So, you as a city have to meet that 1.1, you have to meet that refurbishment replacement account, and then we have to, whoever your rate study provider is is look at all that and figure it in. So, the front page, the the main thing I'd like to say is I thank you for trusting us to do it. We've been doing this since 1977. Uh it's not our first rate study. It's not our first rate study under Act 605. We have submitted several for utilities across the state and they've submitted them to Arkansas Natural Resources. Chris and myself do the majority of the rate studies. Uh but the key to any rate study, and this has been the problem from the very beginning. Before you look at a rate study, a rate study is only as good as the information we receive. So, understand if you give us good information, we'll give you a good rate study. Another rate study provider will give you a good rate study. If we get bad information, it's not a good rate study. So, I remind everybody, and if you look at that front page, the second paragraph, it talks about that. We got to have good information. Hopefully, we got good information. Mr. Penner spent a lot of time talking with me back and forth before he accumulated all the numbers and provided it to us. So, I feel pretty comfortable about it. Now, page one just reference the law, Act 605. Page two, if you want to turn to it, we start looking at the refurbishment and replacement account. Refurbishment and replacement account is a is a new requirement that you have to fund 5% of your total revenues. We're looking at water first, and then we'll look at waste for water or sewer second. But, 5% of your total revenues. When we looked at your information, you had metered water revenue sales from meters of 1,804,588 dollars. You had non-metered revenue of 150,680 dollars. For a combined revenue of 1,955,267 dollars for your water. We have to set aside 5%. 5% of that amount equals 97,763 dollars. That refurbishment replacement account is similar to a depreciation account. The original law said you couldn't spend it unless the council met and approved it and had to be over a thousand dollars expenditure. In 2023, we went back to the legislators and said that's too cumbersome for utilities to have to deal with it. It's supposed to be set aside for their needs and when they need to use it, it shouldn't be that way. So, we passed Act 545 of 2023 that took that away. So, that's not in the law anymore. It is your money to spend as you see needed on the water system when you need it. So, understand that. You don't have to have a council meeting to vote to approve that. The original law said that, but Act 545 amended that law. But your your refurbishment replacement account will be 5% every year of your total annual revenue you will fund into an account for needs when you have leaks, pumps go out, and things of that nature. Any questions about the refurbishment replacement account? If you'll turn to page three, that's where we started gathering your information. If you go to 3A, the top part one and two talks about Act 605 and the requirements. The water rate study findings starting under 3A, existing debt principal. You had 251,205 dollars you spent to pay a debt or debts for the water system. We added that 100,000 emergency money that you borrowed at 2.55% for 20 years. And the and annual payment for that is $6,579. So, your new annual debt that that second loan is principal and interest together. It brings your total new total $257,784.75. Your debt on your water system that you're making annually. That's all your different loans you might have that's accumulated for the water. Your your yearly interest is $19,452. Total amount of water sold to your customers is 378 million 436,000 gallons. You're looking at a number that says 378,436, but we're calculating everything in a cost per thousand. So, we already took that thousand divided into the total millions to come up with the 378,436. Cuz when you bill and you charge, your rates are what? On a cost per thousand. So, this will give us a number what the new cost per thousand will be further in the rate study. The astounding thing you need to look at is the next line. You produced, you pump from your water treatment plant or plants 1 billion 428,000 of 428 million 34,000. Total number of customers
11:18
Unidentified Yes.
11:19
Unidentified Can you repeat that for the for the listening audience?
11:22
Dennis Sternberg (Arkansas Rural Water) Well, it'll it'll be highlighted again, but understand you sold 378,436,000 to all your customers, your 3,868 water customers. But your wells and your water plant produce 1 billion 428 million 34,000 gallons. We'll talk more about that, but I just want to highlight that and it's a good point you bring that up. You have 3,868 customers at the time we looked at this. Uh it can go up or could go down. Your metered water revenue again was metered revenue was 1 million 804,588 dollars. Your non-metered revenue is 150,680 dollars for a total revenue for the water 1 million 955,267 dollars. Your total operating expenses 2 million 697 You have an income of 1 million 955,000. You have an expense of 2 million 697,000. You have a payment required to reserve account of $58,658 a year. You go to the next page four. 5% of the total revenue again looking at the refurbishment replacement account is $97,763. So that's the information we use. Now we go to the next section to calculate what you have to have to break even. You have to generate 3 million 131,331 dollars to break even. Your calculated debt service was $7.09 before we added that 100,000 100,000 dollar loan at 2.55% for 20 years. And now your new debt service is $7.23 per customer per month. You add that into the minimum bill to guarantee that you generate the num- number of dollars you need to make your payments to your uh lenders. Your calculated operating cost per thousand, remember, we calculate per thousand. Your calculated cost per thousand is $7.39 per thousand. You have a shortage of your revenue of $1,176,063.
14:01
Unidentified Shortage of the revenue?
14:02
Dennis Sternberg (Arkansas Rural Water) Shortage. Under the water. Water only, cuz we'll get into the sewer here in a minute. All right. With the emergency loan of $100,000, your average monthly water bill, when we take all those numbers, we average it out by your number of customers, some customers use less, some use more, but we do it on average. Your average bill is $67.44 on water. Calculate a minimum rate allowing a thousand gallons and funding the refurbishment replacement account. Uh the new recommended minimum bill is we take your debt and we said $7.09, it's actually $7.23 now. You'll see on the next line below that. The original one was $7.09 plus $7.39 if you give a thousand gallons in your minimum bill, your minimum bill would be $14.48. With that $100,000 loan, it'll be the $7.23 for that total debt, $7.39 for the cost per thousand, bring your minimum bill to $14.62. Break even. Now, when we talk about how much water we sold and how much we pumped, the very bottom line, calculated yearly average water loss, 73.5% of your water is being lost in your distribution system. 73.5% That's the issue. We know we have problems. That's why Chris is back down here today to look at your system to try to help identify where we're at, but that's the problem. That tells me one thing. You have a neglected system. We've talked about it before. Aging infrastructure, neglect of maintenance. You know, you've got to keep up on the leaks. I know it seems like you're you're going nowhere, but you've got to keep up with them because why? Your water plant is struggling now. A year ago we were over here. When we all went down with water over here and we didn't have the water in the West Helena side. So, again, you're running 20 21 22 hours a day with with leaks still happening. Long-term we need to talk about that after we get through the rate study, but there there's issues and that's the highlighted issue. That's the one thing the state wants to see. What is the efficiencies of systems? Uh but I want to bring that out. 73.5% You turn to the next page. I talked to you about it debt service coverage ratio. Every system has to have a minimum of 1.1. The way you figure that, you take your not net operating income, subtract your expenses, your total revenue, subtract your expenses, and when you do that here, you have a negative 742,406. You divide that by your annual debt. $270,657. That gives you a negative 2.74. What do we say we had to have? At least a positive 1.1. So, we do the next block below that. We do a new debt service coverage ratio calculation based on the rates being implemented and generating the revenue that we say will get you to the break even. So, your new revenue will be $3,124,753. Minus your expenses of $2,697,674. $2,697,674 leaves you with a net operating income of $427,079. You divide that by your total debt. That's $270,657, and you end up with a positive 1.577 debt service coverage ratio. Meaning you've met that 1.1 requirement. You go to the next page. Now, we start looking at the sewer findings. You have a yearly principal of $8,504 on on your sewer. You have an interest of $6,321. Your total gallons of water sold are on the wastewater side is 238,556,000. Again, you don't have as many customers on the wastewater as you do on water. Most cities don't cuz everybody's not on sewer. Uh you also have some additional outside wholesale customers you sell to a one, anyway. Uh but your number of active customers on sewer at the time we got these numbers was 3,631. Your total revenue from metered sales was $920,714. Your expenses was $626,161. You had to put into reserve per year per your loan requirements $31,682. Payment to refurbishment replacement account, take 5% of the 920,714 and it leaves you $45,035 that you need to be setting aside for the sewer refurbishment and replacement account. You go to the next page. This is where it starts telling you what you have to generate to break even. You have to generate $718,903. Your debt per customer is only a dollar $0.07 per customer per month. Your sewer cost per thousand is $2.82 per month per thousand. You actually have a surplus under the sewer of $201,811. Based on the numbers provided. Your average uh bill per month will be $16.50. Your minimum bill new minimum bill, you take the $1.07 on the debt plus the $2.82 for the cost per thousand gives you $3.89 for minimum bill break even and everything after that $2.82. Current sewer rates are $9.27 for the first thousand and $1.82 for the next for everything after that per thousand. But you have needs on the sewer, too, that's probably not been addressed. Uh So, you know, don't don't think you're in great shape on the sewer. You're in better than what you thought originally, but uh it's not the best. Going to the next page, you look at your debt service coverage ratio on sewer. We take the $920,714 in revenue, subtract the $626,161 in expenses leaves you $294,553. You divide that by your debt, your principal and interest, which is $14,825. It gives you a 19.8 debt service coverage ratio. That's excellent. Uh So, your rates are adequate for the rate study requirements. Now, I'm sure, as I mentioned, you have needs on the sewer that need to be addressed, and you probably haven't been doing that just because of the water situation. The next page gives you a summary of the water and sewer rate study findings. Your last adjusted rates were October 1, 2019. Your minimum bill within the city 5/8-in meter is $16.20 for the first thousand. 3/4-in is 1620 for the first thousand. A 1-in meter is $26.58. A 2-in meter is $63.20. 3-in meters $82.10. 4-in meters $164.50. 6-in meters $209.72. 8-in meter is $330.19. You presently charge $2.73 for everything after the minimum, per thousand. Then, you have an outside rate, and you can look at that based on the size of the meter, and you still charge $2.73. Again, uh from our records, it shows present sewer rates were last adjusted on August 13th, 2019. The water was done in 2019, October 1, 2019. Your minimum bill on the sewer is $9.27 and $1.82 per thousand. Your new water and sewer rate study findings, water new recommended break-even rates. You take the debt, debt plus your cost per thousand was 1448. All over would be 739,000. Sewer is 389 for the first thousand, 282 per thousand after that. That's what the rate study show. New water rate revenue. Utility sold at 378,436,000 gallons from January 1 through December 31st. Water utility showed to have 3,268 residential customers, 599 commercial customers, and one wholesale customer. For a total Excuse me, total of 3,869 customers. Your minimum bill varies on size of meter. So, it'll all be different based on the size of meter. All customers are on the same cost per thousand after the minimum. Your residential customers are 3,268. They used 214,713,000 gallons. You divide that by 12 months, divide that by the number of customers, 3,268, shows an average of 5,475 gallons per per customer per month. That's an average. That doesn't mean it's exact because everybody uses less or more, and that's where the number's made up. Turn to the next page. You take that 5,475 gallons per month average per customer. That the first thousand gallons, based on your minimum rate, is $16.20. And then we charge $7.39 for the next 4,475 gallons. Generates $33.07 for a total of $49.27. You take that by number of your customers, 3,268, that equals $161,014 per month it should generate. Times 12 months will generate 1,932,168. Your commercial users, 599. They used 136,035 divided by the 12 months, divided by the 599 customers, their average usage is 18,925 gallons. The first thousand based on the 1620 minimum bill, everything after that is 739. 17,925 would generate you uh $132.42, 46 cents. For combined total per customer commercial per month, $148.66 average. Take that times your 599 customers will generate 89,047. Take that times your 12 months in a year will generate 1,068,564 dollars. You have one wholesale customer, Long Lake Water Association. In their contract, it's not to exceed 3 million gallons per uh per month. The monthly average usage per customer under the the wholesale customer, they used a total of 27,686,000 gallons divided by the 12 months leaves you two 2,307,000 gallons a month. They're under their 3 million. You take that divided by a thousand, that 27,686 leaves you 27,686. Your total revenue for wholesale customer last year was $37,017. You divide that by the total gallons, 27 uh thousand 686, that's a dollar 38 a thousand. We're saying that 27 million for the year, 27,686,000 can be no less than $7.39 just like your customers. That will generate $204,599 a year. Average cost per month to the Long Lake would be $17,049. If you look at the next paragraph down, shows you the new water rate projected metered revenue. We said your projected residential annual revenue will generate $1,932,168 per year. Your projected commercial will generate $1,068,564. Your wholesale will generate $204,599. Your total projected annual revenue will generate $3,205,331. Your present water metered revenue is $1,804,588, which would project you a difference in additional revenue of $1,400,743. Which would more than cover the break even. Any questions? I know that's a lot of numbers real quick.
28:03
Councilwoman Maxine Miller (Ward 1) Can we go back to page nine? I just have a question cuz I'm I'm trying to make sure I'm understanding you. So, right now our customers who go over their allotted if I'm understanding correctly, 1,000 gallons it's at the $2.73 after that.
28:25
Councilwoman Maxine Miller (Ward 1) Right. Right. This new uh New rate profile. rate is requiring everything after that thousand to be $7.39.
28:36
Councilwoman Maxine Miller (Ward 1)° Exactly right. Okay. The only thing that makes me stop and think about that for a second though is that we have a lot of customers who have leaks that I don't know are always their fault. And so that's that concerns me that say for instance if they have a leak out in their yard they don't know about or they rent from somebody and the landlord doesn't do their due diligence or whatever then they could potentially end up with a pretty hefty bill with this. What are we what is in place what would we do to ensure that before we ask our customers to pay that a $5 different I mean what do we do? How how do we do that?
29:29
Dennis Sternberg (Arkansas Rural Water)° I will tell you how water systems across the state and the nation do once it goes through that meter you're responsible. The landlord or the customer the renter or the homeowner. Now is it cheaper for me to go hire if I'm a renter to go hire a plumber if I can get my landlord to do it? Probably so because why? Your water bill also your sewer bill is based off your water usage so they're both going So understand that. But you've got to educate your public to say and hold landlords accountable saying you've got to do your due diligence. You've got a problem. Or you move out of that house and go to another place. I mean I'm just telling you once it goes through the meter it's no longer the water system's responsibility. I understand your concern don't get me wrong. Uh but that's a that's that's an issue that every system deals with with some places. I mean and the worst deal is landlords in a lot of cases ignore it. They well I'm not worried about it. Uh they don't hire a plumber and go out and fix it. Uh
30:37
Councilwoman Maxine Miller (Ward 1)° But I mean because you said back here
30:40
Dennis Sternberg (Arkansas Rural Water)° and I not saying I'm against it.
30:42
Councilwoman Maxine Miller (Ward 1)° Oh, I understand.
30:43
Councilwoman Maxine Miller (Ward 1)° That you are with your study, you showed
30:46
Councilwoman Maxine Miller (Ward 1)° us that we are Upside down. Yeah, we're very upside down. Like we're
30:53
Unidentified We found the number.
30:58
Councilwoman Maxine Miller (Ward 1)° We're that we're losing 73% of our water.
31:02
Dennis Sternberg (Arkansas Rural Water)° Right. And so
31:04
Dennis Sternberg (Arkansas Rural Water)° You're but understand you're losing it. It's going through the meters being accounted. You're losing it through either and you got newer meters here in the city, is that not right? I'm So it's the meters
31:18
Unidentified are probably act
31:19
Dennis Sternberg (Arkansas Rural Water) You're losing the water from your water plant to the meters. Your water plant has backwash water. You backwash your filters. That's that's part of it. We'll talk more about that when we get to the towards the end. But we also have leaks. The fire department uses water, but people will say the fire department use a lot of water. That's not your problem. You've got leaks, leaks, leaks. You got an aging infrastructure. You've got galvanized lines and you they old service lines that need all be replaced. I mean when you at when you talk to your water people, they'll tell you the leaks they fixed are probably on galvanized or lead service lines. And the lead service lines has another pot of money totally available to replace them. Uh but that's not where we're at now. We're looking at the whole picture. I don't disagree with your concern. But how to handle it, I you know, the water system's responsible up into the meter. Through the meter. Private property, it's the property owner. Any other questions? If you got questions, it's now it's time to act. Well, we talked about the 378 million gallons you sold. You had a total of 3,869 customers. Uh minimum bill is different based on the size of meter. Uh on that We talked about the total amount of revenue it would generate with the new water rates. Now we'll look at the sewer. Sewer rate filings for break-even amount sewer new recommended break-even amount. This is just recommended from the rate study and then we'll talk what the final recommendations are. That's $3.89 for the first thousand and 282 per thousand. Right now you're charging $1.82 per thousand. So there's a dollar on every thousand that you're losing to break even on over the minimum. So remember that as well. Uh your residential and commercial commercial customers were 3,631. Uh monthly average figured to be 5,475. When you calculate that out, right now your minimum bill is 927 and then at 282 per thousand, the new rate will generate $12.61 for combined minimum uh monthly average of 2188 on sewer. Times your 3,631 customers will generate $79,446 a month. Times your 12 months will generate 953,352 dollars per year for sewer. Right now if we did that, we'd have 953,352 dollars. Your present rate generated 920,714 dollars. So you'd have an additional yearly revenue of 32,638 dollars. Your new projected water and sewer rate total annual revenue, we have the water at 3,205,331 The new sewer projected rate of 953,352 dollars. Your non-rate revenue for the city was 150,679. Gives you a total combined water and sewer revenue of 4,309,362 dollars. Present combined water and sewer revenue is 2,875,981 dollars. So, you have an additional revenue of 1,433,381 dollars. If you remember, from page four, we had a shortage on water of 1,176,063 dollars. So, you're generating 1,433 thousand additional dollars. Now, the other thing the rate studies providers were required to do, we have to do a five-year projection of your revenue and expenses based on the rate study findings. Under our rate study findings, what we have found over the years, A&RC agrees, the health department agrees, uh system don't like to raise rates. That's always been a concern. Let's just break even and go on. Hopefully, we can get by. But, that's what gets a lot of systems in trouble. The cost of living every year is going up. So, we recommend, after you get your rates set to where they need to be, every January, you do a small 3% increase on your cost per thousand after the minimum. The reason for that? Customers accept a small increase, plus your your expenses are going up. So, in these calculations, we did a 3% on revenue and a 3% on expenses to show you what the the additional revenue would do, what the additional expenses would do, and you still meet your debt service requirement of at least 1.1. When you combine the water and sewer together, we have a a revenue of $4,309,362 the first year. We have a refurbishment and replacement account of $215,468 that you will be funding, and you'll have money to fix the leaks. So, understand expenses, $3,323,836. Your principal and interest combined is $291,871, but you have a debt service coverage ratio of a 3.3. You take your expenses from your revenue, and that gives you the not non-operate a net operating income, and you divide that by your debt to give you the debt service coverage ratio. Year two, it goes to $4,438,682 in revenue. Your refurbishment replacement account goes up because your revenues is going up to $221,932, and that's based on the previous year's revenue. That's how you figure in your budget, so you know what to budget for. Your expenses are going up to $3,423,551, and your principal and interest is staying the same unless you borrow more money. You borrow more money, that goes back into your debt, and then we have to do the calculation again. But, you have a 3.3 combined with the new rates if you implement everything that will generate that amount of debt service coverage ratio meaning the lenders is not afraid to loan you money if they have to. Because you're you're sustainable on your rates. And then year three goes to 4,571 and you can look at it all the way across. Only thing that changes is if you have to borrow money. Then you have to figure that back into your debt, your principal and interest. The records also show one of the things under Act 605 they want to know how much cash on hand every utility has. Your records showed to have $546,605. The reason for that they want to see how long you could operate without people paying their bill is what they tell me. But your expenses is $3,323,836. You divide that by 365 days in a year. Your daily operational cost for the water and sewer is $9,106. That's everything. Cash balance could cover 60 days. Your goal is 1 year. The larger the system, the more cash balances you need. So it's showing you a thin line you're on. You go to page 13, that's the recommendations that we're making. We recommend you leave all minimum bills at the present rates and increase the cost per thousand to $7.39 for water. Minimum bill on sewer would be 927, leave the minimum bill as is and increase the cost per thousand to 282. Helen of West Helena Water and Sewer Utilities rate show from the information request performed the water and sewer rate study, the rates need to be adjusted. It is recommended to perform a rate study each year to ensure your utility water and sewers generate enough revenues to be sustainable. Act 605 of 2021 requires any utility that the rate studies findings need to be increased must increase your rates within 1 year. Must increase whatever the rate study provider provider findings are. You no longer get to say what it's going to be. The law says you'll have to implement whatever the rate study findings are. But, they give you 1 year to implement. Or, if it's less if it's if it's less than 50% increase, if it's more than a 50% increase, they allow you to do it in 2 years. The water rate increase for more than 50% and this is more than 50%, the city council should increase the water rate by 50% of the total cost per thousand in a 2-year period. So, you're not hitting everybody at one time to that $7.39. You'll do it in the 2-year period. I'd I'd continue to use the present minimum bills at the present rates, increase the rates annually in January of each year by 3% on the minimum bill and the cost per thousand by 3% to try to keep up with the inflation. Next page shows you the first year what our recommendations are. You leave the minimum bills as is and you increase everything over per thousand to $5.06. So, you're going from 273 to $5.06 per thousand the first year. This The recommended inside city customer bill for 4,000 gallons, and 4,000 gallons is the standard. Everybody looks at what's it cost for 4,000 gallons. The recommended inside customer bill, inside city customer bill, will be $31.38. The present rate inside the customer bill for 4,000 gallons is $24.39. So, you'll have an increase inside the city customer bill of $6.99 a month. The second year, outside the city, we go up to $5.06 as well. And theirs will go up $6.99 per month average. Your wholesale rate will go from 273 to $5.06 per thousand the first year. Your second year is when you go to the keep the minimums the same and go to the $7.39. And you'll go up another $6.99 per month. To get you where you need to be. That's on the average for 4,000 gallons. The outsides of the city will go to for 739, and then the wholesale the second year will go to 739. I would leave all meter size groups at their set minimums since they are already above the new minimum bill required. The water rate cost per thousand gallons over the minimum bill will increase from 273 to 506 per thousand per year per thousand gallons the first year. And in the second year, the cost will go per thousand gallons will increase from 506 to $7.39. Your new sewer recommended bill will be seven or 927. Your minimum bill will stay the same. All over will go to $2.82. And it will not be phased in. It will be immediate. It should be remembered the city hasn't raised rates since 2019. The cost of living has continued to increase each of those years. I recommend it to increase cost per thousand annually by at least 3% to keep up with the rising cost of your system or you will slowly be falling behind in needed revenue. Small rate increases customers will accept easier than major rate increases. Helena West Helena water produced 1 billion 428 million 34,000 for the 12-month period, sold 378 million 436,000 which shows the water loss to be 73.5% per year. All systems going to have water loss due to the age of the system, miles of line and meters that have slowed. What did we just say earlier in the meeting? You've You've replaced the meters, so I feel good about the meters. They're probably accurate. But everything else goes back to your aging system, your infrastructure. And it's just facts. I mean, the numbers tell the story. The city must have a consistent disconnect policy. You can raise rates all you want. If you're not going to disconnect people when they don't pay their bill, you're making it harder on the ones that's paying the bills cuz they're the ones covering. You cannot carry $800,000 on your books as bad debt. You have to be fair and consistent to everybody. It's not easy, but it's the only way to make things work. Cuz you can keep setting rates all you want if you're not going to charge the people and collect for it. That's only way to do it. And that's the one thing I've learned in all my 45 years of doing this. And I've talked to many utilities in all those years. That's the one policy that you have to hold stern to. The bill is due on due date. If you don't pay it, they add a 10% penalty. I'm sure they do that here. And if you don't do it by the 25th, you're disconnected. That's why your deposits need to be looked at. What is your charge for deposits? Most systems have a flat rate for deposits for homeowners and renters. Different. Why is there difference? Normally, the homeowners is going to pay the bill. The renters are the ones that can move on. There's actually a law in the state that we passed. I want to say in 2005 where you if they move from your system to another system and you find out where they're at, all you have to do is contact that system and say Dennis Sternberg left. Helena West Helena owe me a bill of $30, $70, whatever it is. The law says the new utility will shut you off until you satisfy that bill. It's been through the Attorney General's office and it's with been upstood. Upheld. Attorney General says it's the best thing ever happened and utilities need to use it. We had to go back cuz the Attorney General said a water bill is water. So, we had to go back and amend the law and put water and sewer. But, we did that in the next session. Now, the municipality asked for trash. If you're a city and you want to put trash on it, you can do that. So, that's on there. If another sewer system is on your water and that's a public system, they can actually notify you now and say you have to shut off my customer because they're not paying my sewer bill. The laws have changed and they're out there. But, you have to be fair and consistent. Set your policy and be fair and consistent. Because who they going to holler to that but the employees when they come in to pay the bill? Your front office is where they're going to holler. But, be fair and consistent and back your employees up. That's the policy. So, I I would encourage you to remember that. Biggest issue on the next paragraph, I see the city needs to take immediate action on the is the need to increase rates and start replacing all galvanized water lines with new PVC pipe and disconnect the old galvanized lines and run new service line from the PVC line to the meter boxes. Abandon the old galvanized line by cutting and capping them off completely from the system. Don't leave them there if you run a new line down there, that old galvanized line. Disconnect completely dismantle because the leaks are still going to occur on that main line if you don't disconnect. That's the biggest thing I see problems a lot of time engineers will say, "Well, we're going to put in 5 mi of of PVC pipe, replace all this older pipe." Well, they go in there and they do that. Well, they hire the contractor and then they never disconnect. And then you're left with the leaks still happening. Make sure when that happens, when you hire an engineer for your line replacements, that that is part of it. Cut and cap. Do away with that old one. There's where your problem is. If you don't, you're still going to have that 73.5% loss. And I've seen it happen too many times. I just warn you. Make sure you hold them responsible on that. Uh asset management plan. The new thing under the rates, under the law, you have to do an asset management plan when you submit your rates. The first rate studies were due July 1, 2024 for all systems 500 connections and below. I can tell you right now they have covered my office up, Chris's office, my our emails, our phones cuz they waited to the last minute. They didn't meet the requirement and we are backed up big time doing rate studies and getting good information. That's the other problem. And we make several phone calls to make sure they understand that this can't be right cuz we can look at them and tell you it's not right. You pump more water. If I seen yours first time I seen it, I wanted to make sure I had a history knowing that you had a big water loss problem. I didn't realize it was to the magnitude it was. Uh but you definitely have a major problem there. But those types of things you need to track and make sure. That's why we say do an annual rate study. You need to know what's going on in your system. There's trends you can see start climbing. And you need to address it.
50:33
Dennis Sternberg (Arkansas Rural Water)° What?
50:33
Dennis Sternberg (Arkansas Rural Water) Oh, I'm sorry. Uh But the asset management plan is something you have to put together as a city on all your infrastructure, and it's going to ask you about six or seven different questions on each one. When was it originally installed? What did it cost? How many uh size of lines you got? 2-in, 3-in, 4-in, 6-in? Are they all PVC? They galvanized? They ductile iron? They want to know what the life expectancy is of that system. Most lines are when you borrow money from the federal government, you get a loan from USDA, it's 40 years. That's basically the life cycle of your system. When you get it paid off, your system is like a new car. It was new when you got it, but now it's not, and needs to be replaced. Your infrastructure needs to be replaced. Have a long-range plan. Lay out the priorities. You know, as I mentioned a year ago, we was over here cuz we were we lost the whole water system in West Helena. You know, we're struggling today. Hell, I don't want my guys to be over here the 4th of July. You don't want to have your people out out working all the time. But we we got to watch what's going on. And you got to stay on top of it. Fixing leaks are important. But the rate study findings based on the figures your system provided for this rate study, it shows water and sewer rates will need to be adjusted. This is on page 15 of the bottom paragraph. Also, adjust rates annually for the 3% to meet the revenue needs for your water system and meet the rules pertaining to Act 605 of 2021. This will allow your utility to remain sustainable water and wastewater utility into the future. Rate increases are never taken lightly, but small increases are accepted a lot more easily than large increases by your customers. The final page, 16, is any rate study provider that does a rate study has to submit a certification page saying we have complied with Act 605. We looked at your operation and maintenance, your debt service, your required reserves, required replacement and refurbishment account, additional capital expenses, annual audit, agreed-upon procedures, all annual expenses, and all annual revenues. And that's what Mr. Turner provided me when I started working on this. I'd be glad to answer any questions on that. But right now I would tell you, knowing the condition of your system today, you have made you have many leaks still going on. If the manpower you have isn't adequate, which I don't think it is, then you go back to hiring your contractors and getting them paid to get that leaks fixed. You can't afford You're in the summertime right now, the heat of the summer, the demand on your water system's going to be its greatest. Don't lose this system. You know, A&RC asked me to hand out something as well uh in regard to what you've been approved for. This This is what the commission has approved that on loans It's not grant money. Oh, this works. This is what they have done by loans. What it says commission on recipient on the left-hand side is Helena-West Helena. But if you go to the very bottom of that, Helena-West Helena emergency loan was done on July the 12th, 2023 that of $100,000 at 2.55%. That's what I figured in your rate study. It's in there. So, you can make that payment. Helena-West Helena water on February the 18th was approved for $11 million loan at 4% for 20 years. There's money there. Nobody wants to borrow. But in a time of emergency, you got to do what you got to do. You also have a $100,000 emergency loan done February the 28th, 2024. Remember when the water system went down in the cold weather? We was over here and helped you get that back up and running, finding the leaks and isolating all. We still have, I don't know how many customers of Helena-West Helena on Barton Lexa water. So, the demand on your system right now, we have less customers than we've ever had, and we still can't keep up. We have an issue. And it goes back to the distribution system and the plant. And of course, we lost the well. So, it's a combination of everything. You know, I'd asked you tonight, where at on your new well? I I hadn't heard. Uh and I'm sure every time you drill a well, everything don't turn out fantastic. So, I don't Yeah,
55:47
Unidentified the day that came back last couple days, thought it second day of the process went well. Well, I would encourage them to try to
55:54
Dennis Sternberg (Arkansas Rural Water)° get it as quick as possible. You need water. You have leaks. You have a big portion of your system customers on another water system right now. So, you're paying that money to Barton Lexa for the water they're selling to your customers. Think about all that. That's why so important to get control of all your leaks you can. Get as many contractors you can, your local contractors. But, you need help. You're bleeding. You're in ICU again. I hate to tell you, but I'm going to tell you the facts. You know, I'd reach out to ANRC. Can you get that 100,000 emergency money? Normally, everything is set for what you originally told them you needed it for. I don't know whether that's for line work. It might be for work in the plant. But, I'm certain you can convince them at time of need, we can uh change the scope of work to get the money. But, the first thing you really need to push is get you an engineer hired and get you a priority list and get the plans moving through the health department and ANRC. This is not going to get better. My fear is we go down. I don't want people out water. Uh this is summer time. It's the highest demand we got on this system. And again, we've got big portion of your system. I said big portion, I don't know the exact number. Couple hundred customers off of your West Helena system on Barton Lexa at least. Uh it's crunch time. You're going to have to spend money. Nobody wants to spend it, but you ain't got no choice. I'm tired of preaching, so I mean I'll I'll back down. I'll answer any questions you might have, but you need to get on top of it. You have any questions on the rate study? If not, I thank you.
57:48
Unidentified As of least 11 million dollars that you just discussed
57:51
Dennis Sternberg (Arkansas Rural Water)° Yes.
57:52
Unidentified Should we consider that in in adopting new rates?
57:56
Dennis Sternberg (Arkansas Rural Water)° When anytime you borrow additional money, the only one that's figured in there is that 2.55 for 20 years. Anything else will have to go back into the rates. I didn't figure it cuz I don't know what you're going to do. I'm just telling you have to do something. And then the ANRC will tell me, "Dennis, figure another rate." Or they'll tell you what your rate is going to have to go based on that loan. Based on your number of customers, based on the length of the note.
58:21
Unidentified Mr. Chairman, just so everybody's clear, the 11 million you speak of is an approved amount, but we have not received any of it.
58:28
Dennis Sternberg (Arkansas Rural Water)° No, you can't receive it. You have to submit something.
58:30
Unidentified Right.
58:31
Dennis Sternberg (Arkansas Rural Water) You've got to submit drawings, plans, and amounts. That's why an engineer is so important. We don't need to keep kicking the can down. You've got to get an engineer. The layout, the priorities, and the long-range plan for West Helena. That is the priority right now. Helena is not in the best shape water system, but it's not in a crisis as we are, but it could be tomorrow. That's, you know, I just can't stress it enough. That's where you're at. Action needs to be moving. First thing I would do would be reach out to ANRC on that 100,000 and say, "Scope of work is fixing leaks. We need to pay contractors to get these leaks fixed to try to maintain Get your engineer hired. I'm certain you had to do an RFQ, request for qualifications. I don't know where you're at in that process. Hopefully, you're looking at that and selecting an engineer, but you need somebody to move. You need somebody first and then you need need that impress the importance of expediting this as quickly as possible. This is not going to go away. It's only going to get worse if we don't get control. The well will help, definitely. But you're still in problem. I know I've taken up a lot of your time and I appreciate you allowing me to present. If you have any questions, reach out to me. I think you all have got my number at my office. Uh Chris will be over here most of the time more than me, but uh and he can answer any question that that comes up. Thank you.
1:00:10
Unidentified Thank you, Mr. Dunbar.
1:00:31
City Attorney Andre Valley The mayor just asked me what we were just discussing uh fastest condition of the deeds for uh the the well. We approached the Boys and Girls Club. We had a long meeting with them and they got back with the mayor. Uh in the engineering plans what it showed was we need a 30 by 30 tract of land. 30 by 30, which is 900 square feet. The Boys and Girls Club told us they'll sell it to us for $25,000 plus an adjustment to their water bill plus maintaining the the the the their fields. Now, there are 43,560 uh square feet in an acre. And we're only talking about 900 square feet. So, if you do the math on that, that's approximately $1.2 million an acre. But, that's the offer right now. And so, uh the mayor's going to continue to negotiate, but I need your authority to go go ahead and proceed with a eminent domain against them cuz time is of the essence.
1:01:47
Unidentified Second.
1:01:48
Unidentified Is there a second to the motion? Any discussion? Madam Clerk, will you call the roll, please?
1:01:56
Roll call Roll call (attendance) — present: Maxine Miller, Dr. Kyle Miller, Joe St. Columbia, Don Etherly, Monica Davis. Absent: Latoya Harris.
1:02:06
City Attorney Andre Valley Now, also, I prepared a resolution tonight. Uh last week, as an update, we were there at our Department of Health, uh we had a hearing regarding a consent administrative order. This resolution addresses four uh consent administrative orders. The mayor has agreed to provide them all to you, but we need approval just to show that you all have have received them and that you acknowledge them. Uh ADQ, well, what used to be ADQ, Department of En- Energy and Environment, this uh Environmental Department of Environmental Quality Division, uh we have two uh consent administrative order with them. One is related to the water utility, the other is related to the landfill. There are two related to the Department of Health. Department of Health, we had a hearing on a consent administrative order for the West Helena system and for the Helena system. And one of the things of note about it, uh after the hearing the other day, what they told us, they said, "The The full board is going to take up the consent administrative order on July 25th." The order has 90-day milestones in it for for you to be aware of. And part of this, we need to have an engineer within 90 days of the of them approving the order. And the other thing is we have to have people with all the licenses uh within 90 days of the entry of the order. And so we need to advertise for the people to have all the licenses and we probably more than one person. Because the consent administrative order also says that uh what you have to stay in compliance for a year. And there's some hefty fines in it. They they proposed about approximately 750,000 miles in fines. Some of them have been waived already because of some compliance issues that we've proved to them that we've complied with. But it's still very I believe it was 450,000 what they were asking for. But all of that is waivable if we comply with the consent administrative order from the Department of Health. And the two major milestones are one, having an engineer uh and the engineer had to draw a plan to give to the Department of Health. Two, to have people with all the requisite licenses uh for the department. There have been some communication issues. In the past what happened and the mayor and the chief of staff and I have met about it. Uh during the Smith administration there was a consent administrative order signed. It was never presented to the city council. Never presented. I don't know if the mayor ever saw it but he signed it and it started a clock ticking. And uh some of the things we were not aware of but we've gotten to this point where we have to have an engineer and we have to have people licensed. And I recommend that more than one person have the requisite license because if you fall out of compliance during the year uh then the fines will be imposed on us. And so we need to advertise for the position. And it's one of those things that the chief of staff and the mayor and I talked about when we were in Little Rock the other day. Uh we have to look at the base pay and we look at incentive to get the people who are there at the department to have the licenses and etc. Uh we're not calling but there were some who have applied but never sat for the exam. There was others who have gotten licenses and gone forward and obtained license, but they don't have all the requisite license. But, licenses are major thing because other than the time frame of uh, Mr. Scrogins, Tony Scrogins, uh, when the last year of the mayor's first administration, uh, from time we had Benzie Collier, then we had a gap, and then you had Tony Scrogins, and we've had issues with people having the licenses. But, we have to advertise. And people Same thing with Mr. Rhodes, he has all the certifications. He's almost at the point of receiving the majority of his certifications. At this point, yes, he he is taking and he had he will have some of he'll have half. They want someone to have the complete certifications for both. Uh, I think he said he would have he would be completed like within the next month or so.
1:06:07
Unidentified I understand.
1:06:08
Unidentified One thing that they recommended in the hearing, and they they said the transcript would be available at the bar. They made they recommended that listen, we need people boots on the ground now. And we need y'all to take this serious. And we appreciate everything that that that Mr. Rhodes is doing. We We pray that he continue to move forward with his licenses. We want to do that. We need an incentive plan to ensure that everybody over there move forward with their licenses. But, what they're saying is get this done yesterday. Y'all have kicked this can down the road too long. It needs to be done immediately. You need to advertise for people, get them done, get them on get them employed within the next 90 days. Get your uh, everybody get your an engineer to have a plan submitted within 90 days. And that's basically what the hearing hearing was what was about. It would have a couple hours, but uh, those are the issues that
1:07:02
Unidentified Were you about to say something, Chipster?
1:07:04
Unidentified Yeah, they they call us over there to do that. That's the essence of
1:07:07
Unidentified Yeah.
1:07:08
Unidentified Um so is the issue has persisted for too long. And the licensing particular that they want you to have in West Helena on the water side, I think it's called distribution. It's level two license. And on the waste water is a level three. And Helena is a level three for both or it's the flip of that. It's one of them is level three on both and the other one is level two and a level three.
1:07:30
Unidentified I think you got it right. West Helena is two and three.
1:07:32
Unidentified And And the packet we submitted to you all by the link and the hashtag has all of those documents under it. Got two notebooks laying up there. Has all of those documents in there. And one of the things that we're going to get with Mr. Rose so he can get with his guys to address is we got too many uh people communicating with the health department without bringing people into the loop. Um and some of it is I think it's there they're thinking the health department can help them. And the health department when they talking to us is looking at it like, why do you got this renegade employee? But you'll see it in the documents. Uh uh they complain to the health department about trucks not being able to go home or about being accused of stealing time and stuff like that that they sent to the health department. That's not something for the health department to manage. Um but it's in the documents. You you you you you can see it in those. Um so
1:08:27
Unidentified It's It's amazing.
1:08:28
Unidentified So the scan you received Friday had had all that in it. And we just want to go ahead and may I'm sorry. They warned us about a couple things. They said that we need three people. And and general manager at a at a hundred thousand dollars, you need two people at fifty thousand dollars each.
1:08:49
Chief of Staff James Valley That's the operators. One for each system.
1:08:51
Unidentified Right. So they were they were saying if if we comply to everything that these funds would be waived. Uh and as you heard Mr. Sternberg say that we we need to do a rate increase. Uh we need to get contractors back on the ground to get this water system from failing.
1:09:07
Mayor Christopher Franklin I'm glad somebody from the outside has kind of came inside to tell us what should be what should be done because you know, hearing it from us is like, "Oh, it ain't that bad." But it is. Quite They also got on us about the the the buildings where these pump stations and pump stations and the building where the water treatment is. They saying how you can look in and see from the inside to the outside. Those buildings need repair. No, I mean, there's a lot We have a lot of problems. And when I was on the city council, I kept saying that, you know, when I would go out and look at the West Helena plant, you could see the the doors had came from separate from the the foundation. I mean, the the the wall. You can just push the door but we have we we have to raise rates. We have to get a better water system because I feel like this. When I was on the city council, we we we me, Mr. Anthony, the people who were here, Mr. Davis, we we raised water rates only a little because I know I didn't know the details of how bad our water system is. And I encourage the council uh these outside people can tell y'all something but you have a voice. You can go out to these plants. Go out and look and see how these buildings are falling down. Just look at the the the How can you have a $250 piece of equipment and a machine in in a building that is raining in? You know, I mean, you know, we we we you got to look at it. You maintain your house. And these where where the equipment is, we have to maintain these buildings. These leaks and you I I'm hoping you all have heard and take heed to these leaks. We So, we got to start cut contacting these contractors, getting them back on the ground. With the war we we just got our warning tonight. It's in a If we don't do something tonight, we'll be in the same situation. You just heard Mr. Anthony, one of our own, sit here and he has to get his water from Barton Lexington. Been getting it. But why? We have I mean we we we have too many too many distractions with these people on Facebook contacting y'all telling you a bunch of foolishness. But right now, where are they when they where where were they? Where are they right now when we got these water issues? Everybody hides out, give you a petition, tell you to fix it with the mayor, but they ain't here right now in these issues. Forget my personal life. Let's handle these issues with this water because people cannot be without water. I want the same action we took a couple weeks ago. Let's take this action and make sure we get these contracts and raise these water rates because I'm not going to be the person on the front line saying, "Oh, I didn't do nothing." I'm asking y'all to take action tonight to move swiftly. I mean, I wish you could I would like to see y'all move right now, increase the water rates, getting contracts back in, approving what what what um they asked us in Little Rock to do, what hire general a general manager of $100,000, two operators at $50,000. I I know Miss Millie and it seems hard, but these are the things that we got to do. We going to have raising rates. We Mr. Sternberg said you you hate to jump a big jump, but right now we have kicked the can down the road. It hurts. It's going to hurt my mama. It's going to hurt me. But when energy went up, I paid. When Summit came in here and cut all the gas lines and and put new gas lines into these houses, we had to pay for it. Same thing That's the same problem we have. We have leaking pipes because no one has came in You got a house that we tore down, right? Water still runs to that house. So, but if you go back and look at what Summit did, Summit is the gas company in When they took over CenterPoint, they came in and cut all old lines and ran you new lines to your gas meter so that you so that all these other abandoned houses no longer had gas. That's the same thing we have to do with our water system. Run Run new water lines and cut off old water lines. You'll start cutting off more your leaks then. Am I right?
1:13:16
Dennis Sternberg (Arkansas Rural Water)° Yes.
1:13:17
Mayor Christopher Franklin So, these we we have to get ready. I mean, I know what someone's getting ready to go for re-election, but guess what? Let's go down with something. Let's go down with the we trying to fix the problem in health.
1:13:30
Councilwoman Maxine Miller (Ward 1)° And I understand those suggested salaries, and I don't really have a problem with that. I think from a fiscal responsibility standpoint, though, um the person that we hired as the superintendent of the water department, then he has an administrative uh piece that's being financially uh done. You know, he has a salary, and then this person has that. And that sort of brings it to that 100. I can see where that makes some sense. And if we're honestly going to go out there and we're going to advertise, vet the candidates, make sure that they're fully licensed and all that, okay, I can see that amount of money with the understanding that we pair down with the administrative help that he's getting and perhaps, you know, wait for him to get his license and maybe move him up or something like that. I mean, what I'm saying is we have Cuz he's almost there.
1:14:28
Unidentified He's almost there.
1:14:30
Councilwoman Maxine Miller (Ward 1)° I I understand he's almost there, but that's
1:14:32
Unidentified Something like hold on. Hold on. Hold on. Hold on. You You You You shouldn't be discussing any employee.
1:14:37
Councilwoman Maxine Miller (Ward 1)° Well, I I I I didn't say that. My thing is
1:14:40
Unidentified Two things I want to bring up. I mean, I think you all are putting the cart before the horse. The issue that we have to do is we have to move forward, get the advertising done, and have the the finances to go ahead and say, "We need to hire this person, hire this engineer, and go forward and do that." Uh we can later come to those things. I think the thing is when the assistant city attorney was talking about he's trying to put give you a ballpark about what do people with the license make, what does a general manager make, and those are generalities that that he's stating. But, as it relates to specifics, the specifics are we need an engineer within the 90 days, we need people with the license within 90 days, and we can go from there. Uh and as it relates to discussing any other employee that we have now, um as they obtain licenses, that'll be great. But, the issue the issue is this, time is of the essence, man. We got to move. It it isn't a it isn't a question of of of us waiting to see what the the city have to move because the one thing about it is we don't need to be in a position where we're haggling over uh 10,000 or 20,000 and end up fine 450,000. And and the that's if I encourage you all to read these, they these are very thorough. One is going to one is Westall. You were provided these last I encourage you to read them so you can see they went detail by detail with the timeline, they went detail detail with with things. And a lot of this stuff, in candor to you, the city council was never informed about.
1:16:13
Unidentified Right.
1:16:13
Unidentified I city attorney wasn't informed about many of these things because they were just signed in house, sent to the state, and there was no importance given to it. So, certified letter came in, person never just signed it, sent it back, and you never heard about it.
1:16:26
Unidentified Right.
1:16:27
Unidentified That's part of the reason why we have a resolution here that and we've encouraged you all to make sure you've been provided all four consent administrative orders. We want to make sure that you have them, you've read them so we can discuss them, come forward, and every meeting going forward over the next year the water department has to be discussed.
1:16:46
Councilwoman Maxine Miller (Ward 1) Okay, and and I'm not trying to cut you off. I just want you to understand my point. I'm not arguing or disagreeing. Here's the thing, I want to make sure because we've been paying big salaries for these positions. I'm saying as a not just a city councilperson, but I'm saying as a member of this community. If this is what we're going to do and this is what we're aiming for, then I just want to make sure that we're fully vetting who we're getting, that they're qualified, they've got all the licenses that they're supposed to have, they can do all of the administrative work they're supposed to do, all the reports, that we don't have these that are late or signed illegibly or whatever else happened. I'm saying we need somebody who can do that job. That's just my point.
1:17:32
Mayor Christopher Franklin° I I agree with you. I mean one other thing, I I think the way the city attorney presented that, he said you all didn't get it. This actually predates this city council. Right. So, the former city council people didn't get it. That's what he That's who he was talking See the timeline, they go through and they they were talking in 2019. It had nothing to do with It had nothing to do with with you all. And so, it was So, that's not the Mr. Rose has not failed to communicate with y'all.
1:18:01
Unidentified not?
1:18:02
Mayor Christopher Franklin° Right. And I haven't Mr. Murdock didn't It's It's before then. What That's what Those things are like. What I'm I'm I'm going to say this, the $100,000 came from the people in Little Rock. And the governor also said to us that she they would we would not get any assistance without rates being this low. I I I It kind of bothered me that I've been saying this since I met with the governor that she's saying that we would get no financial assistance from her office until we raise our rates. So, this is the $100,000 didn't come from a number I spoke with and I said, "Oh, we don't know." It came The people in Little Rock said, "This is what it's going to take. You need two licensed operators at $50,000 apiece."
1:18:45
Unidentified Well, well, no. It it it's If you go right there All of this valley
1:18:51
Mayor Christopher Franklin° One one second. You We paying more than that now, but go ahead.
1:18:54
Unidentified If you go right down there to Barton Barton Lakes of the Ozarks We paying in Barton Lakes. They pay more than what we pay. You go right down to Marion. They pay Our folks the folks that we hired everybody They went to Marion. I mean you know I mean you
1:19:10
Mayor Christopher Franklin° When When you think about energy What what what they what they said they pay for energy which is no question. They messed your power lines. The same with police, fire, and water. Water is very important. If the system failed tonight They don't The lady didn't come to your house and jump on you about water. She came to mine and jumped on me about her water. Those are the things that I go through. So, I think when when people in this community talk about It's sitting in this mayor's seat is a horse of another color. I would imagine all the foolish things that happened sitting in this seat that when I when I sit where you all sit I thought it uh Kevin it was a joke and I see what Kevin Smith went through sitting here that it is then you got a council that you have to kind of cuz the public can say this and that and they don't trust you, but here I'm telling you facts in black and white. This is what it is. This is what we need to do. I'm saying when when the when the resolution was put out about something personal with me, we voted on it. Let's get the Let's get the same votes in the action on this water tonight so that we our folks can have water and increase the rates. This when we went to Little Rock and got I was embarrassed to sit there and these folks chew me out and I knew nothing. I sit on city council for 12 years and I knew nothing none of this. While the guy was on the fish bank fishing, we was getting considered ministerial orders. I'm sitting here telling y'all I got a guy on the fishback fishing and you and you watering the toilet. You got billions of gallons of water that we're losing and it's okay. Now, there's leaks all over. We got contracts ready to go to work. We got to find something to do. And I'm not I mean I one thing I don't want to lose is water again. So whatever we need to do, I tell you to I'mma take the needle and run with you. Let's make a move.
1:20:54
Unidentified So is there's a motion to start taking care of some of these issues that we have? But we have to pass the rates by by ordinance. Try to identify orders to bring bring that back for the rates. But at the same time, we can move forward with you've already We've done requests for qualifications for the engineer. Uh at this point what this council should be looking at is uh when the mayor goes out, we advertise for these people with the licenses and be prepared to to discuss a serious salary and give them a salary because the issue is going to be is we have to do that with expediency. Of course, uh you have 90 days, but the problem is we can't wait till the last moment. And we don't know how long the system has, being candid with you. None of us know how long the system has. And we need people on we need boots on the ground. And with the with the strategy 77 does, so when the board meets, they can see where where the kind of jump start. We got 25 25 days jump start before they meet in at the end of this month.
1:21:55
Unidentified July 25th?
1:21:56
Unidentified Right. So we got we got to get a jump start to show them that we're doing the things that we're doing. Yes, I'm I'm with you. I'm I'm I'm feeling the same pressure you feel. I feel it. Right now, we got to show the public I understand that we don't have it, but we got to make a way. We got to make a way. If we I mean no nobody's going to come here with without water in the situation. We got a hospital. If the hospital doesn't have water, we're out. If this industrial park doesn't have water, but most importantly, our customers need water. We need to take advantage of these opportunities that we got. So if we have to meet again this week or after the fourth, I'll be happy. We need to move quickly and I'm going to tell you this with the the people that we we look I I encourage one of two of the council members who want to be in on the on looking for these people, I welcome you on that because I I don't want you all to feel like cuz I I think a lot of Facebook people getting some of our people scared about what we're doing, but I include anybody who wants to be a part of this with the chief of staff.
1:22:51
Unidentified We we should have one. Oh, one.
1:22:54
Unidentified You can have more than one, but one at each end of you or you got to bring the press.
1:22:57
Unidentified Right. So one of each.
1:23:00
Unidentified So I'm just saying I think that's saying. I think I think I'll bring the press, but he has just one.
1:23:05
Unidentified Uh They just updated the
1:23:06
Unidentified No, that's that's the that's the that's the the item they're putting on the ballot in November, right? That's not the current law.
1:23:14
Unidentified That's correct. That's the item they're putting on the That's the proposal for November.
1:23:16
Unidentified I I just I just wanted to be able to trust you all so we can see where we're going, uh especially this body because I know we we y'all y'all get a lot of heat about what we're trying to do in this community, but listen, the door's open. I've said it once before the the mayor's office open. You can come by later, connect, visit, whatever you want to do. My office is open to everybody in this public in this community because we're trying to show people that we need one thing, clean drinking water so we can make sure that we can attract industry to come here. Water, water, water. Mayor Franklin, I really do think that you do care about the functional uh maintenance of our water quality program. I do believe that.
1:23:57
Councilwoman Maxine Miller (Ward 1) I I'd like to be, you know, kind of find out, you know, who you're looking at and all that. It may not be my business, that's fine. I do agree Mr. I welcome you. Mr. I welcome you. made a great presentation. I think it was very clear to me that this is the route we're going to have to go. I mean it's it's a painful bite, it's a bullet, it's going to hurt, but I don't know that we have much of a choice. I don't want our water to go down again. I
1:24:27
Roll call Roll-call vote — .
1:25:19
Unidentified Well, what do we need to do tonight, Attorney Valley, Mayor? What do we need?
1:25:23
Unidentified We don't have ordinance. I was asking Mr. Etherly uh and while Mayor Franklin was speaking, I was saying we'll see if call y'all, see if y'all available tomorrow.
1:25:34
Unidentified We won't be. My husband and I won't be. We'll be out of town. Y'all be out of town tomorrow?
1:25:39
Unidentified Saturday.
1:25:41
Unidentified I mean, unless we can do it by Zoom or something like that.
1:25:44
Unidentified No, we can't do it by Zoom.
1:25:46
Unidentified Could we not vote on it? What time y'all leaving tomorrow?
1:25:49
Unidentified 6:00 in the morning. Can we Can we vote on something Can we vote on something tonight with Can we get it Can we get it done tonight? I want I want them to know everything that we're doing.
1:26:03
Unidentified What What are you trying to vote on tonight?
1:26:06
Unidentified He wants to raise the doctor tonight. That's what he was trying to do.
1:26:11
Unidentified We need need to draft the ordinance and let them look at it. Let this soak in.
1:26:17
Unidentified We can meet probably Tuesday of next week. But this is a holiday week.
1:26:22
Unidentified Tuesday fine with the body.
1:26:25
Unidentified And while we while we getting that done, we need to try to make sure that everything that needs to be done, I want them to have every information all the information that's needed. And hopefully when the treasure get back, we can sit down. Now on the rate study, I believe Mr. Mayor said this tonight, so forgive me if I'm repeating myself. What he told us in Lonoke is that you can go above it, but you can't go below what he put in the rate study. So those numbers, whatever that base is, is what you going to have to do. Mr. Mayor.
1:26:57
Mayor Christopher Franklin° I'm talking about passing rates tonight. State law water, you can pass water rates.
1:27:04
Dennis Sternberg (Arkansas Rural Water) State law says you got to have a public hearing on what a sewer and waste water.
1:27:08
Unidentified That's right.
1:27:08
Unidentified So I I caution you you can't do sewer until you have a public hearing.
1:27:12
Unidentified Right.
1:27:14
Unidentified Now you have to you have to do it based on the rate study findings.
1:27:17
Unidentified Right.
1:27:18
Unidentified And advertise it. I think it's 10 days it has to be in there.
1:27:21
Unidentified It's 10 days advertise.
1:27:23
Unidentified I'm not an attorney, but I do know that. Yeah. So thank you, Mr. Mayor. Thank you.
1:27:27
Mayor Christopher Franklin° So we can we can go and get get the damn thing in the paper.
1:27:31
Unidentified In the paper.
1:27:32
Unidentified Well, first you got to decide when you want to have a public hearing.
1:27:36
Unidentified This is I would imagine we'd do it before the city council meeting. But then I would be the one on the 16th.
1:27:43
Unidentified Right.
1:27:44
Unidentified I guess that's the day that I can think of. 14 days from today. Two weeks from today.
1:27:49
Unidentified But the question is I get the practical question with that is would would that be enough time for publication? Cuz I don't think it'd be published size till next week.
1:28:01
Unidentified Yeah, I don't know.
1:28:03
Unidentified Is there only They don't want the paper on Wednesday.
1:28:06
Unidentified Well, you you
1:28:08
Unidentified Okay.
1:28:09
Unidentified We just have to look at that. Believe it has to be published twice.
1:28:16
Unidentified We have to look at that.
1:28:23
Unidentified No.
1:28:24
Unidentified You see the line that says the new year water line. You want to do water sewer at once?
1:28:31
Unidentified We can just do them both at once.
1:28:32
Unidentified Okay. So, then you got to go out
1:28:34
Unidentified further.
1:28:34
Unidentified Okay.
1:28:35
Unidentified Like 21st line.
1:28:40
Unidentified Whatever 16 and 17.
1:28:45
Unidentified 12
1:28:46
Unidentified What's 3 weeks from today?
1:28:49
Unidentified 1 2 Third May.
1:28:52
Unidentified Mhm.
1:28:53
Unidentified 20th.
1:28:54
Unidentified I don't know what day it is.
1:28:56
Unidentified So, this is 2 + 101. What day is it?
1:28:59
Unidentified 23rd.
1:28:59
Unidentified Can we meet on 23rd to to to drop both?
1:29:02
Unidentified I mean, we can
1:29:04
Unidentified That should give time to publish it twice. It's more than 10 days and
1:29:13
Chief of Staff James Valley So, we we did that one for your public hearing and the rate study on the 23rd.
1:29:18
Unidentified Typically, you do it at 5:30. And then you meet the following at 6:00.
1:29:23
Unidentified Or the meeting follows when the public hearing ends.
1:29:26
Unidentified What was that again?
1:29:30
Councilman Dr. Kyle Miller (Ward 1)° What was that, doctor?
1:29:30
Unidentified What was that again?
1:29:32
Unidentified The 23rd.
1:29:33
Unidentified That means it's 3 weeks away. That's 3 weeks from today.
1:29:35
Unidentified Public hearing.
1:29:36
Unidentified Yeah, public hearing is for the rate study and sewer rates. The sewer rate portion of it, then.
1:29:46
Unidentified Correct.
1:29:57
Unidentified But, we discussed it. There's a resolution before you that was waiting to the fourth certificate of
1:30:03
Unidentified Not certificate. The city administrator orders. Uh I detailed them in section one. uh um There's one related to landfill that was signed by the mayor on 6 10 2024. The LIS number 24 permit number 0258-S1-R1 AFIN 5400086. This consists of 10 pages. There's a second one CAO directed to the water utility signed by Mayor Franklin on 6 12 24 concerning LIS number 23 permit number AR0043389 AFIN AFIN number 54-00086. This consists of 24 pages. There's a second administrative order directed to the city of Helena water and sewer dated March 4th March 1st 2024 signed by Mayor Franklin on 5 28 24 concerning CAO 240 2419 and order and notice of hearing and proposed administrative penalty of hashtag NOHPP 2406419 consists of 19 pages and and a hearing was conducted on June 26 2024. And the fourth is a consent administrative order directed to West Helena Waterworks dated March 1st 2024 signed by Mayor Franklin on 5 28 2024 concerning CAO CO2402416 and order and notice of hearing and proposed administrative penalty of hashtag not N088HPP 2406416 consists of 21 pages and the hearing conducted on June 26 24. I place them all in one resolution cuz y'all previously been provided but resolution is is is ratifying the mayor executing them and that that the council fully acknowledges that it received them, and wants to comply with it.
1:32:05
Unidentified Is there a motion to adopt resolution to adopt Resolution number 10. I said number 10. Miss Miller.
1:32:13
Councilwoman Maxine Miller (Ward 1) Okay, I'll make a motion that we adopt.
1:32:15
Unidentified Miss Miller moves to adopt resolution number 10. Mrs. Davis seconds the motion. Any discussion? Madam Clerk, will you call the roll, please?
1:32:25
City Clerk Sandi Ramsey° Mrs. Miller.
1:32:26
Councilwoman Maxine Miller (Ward 1)° I just This is a point of question. This is This is the vote for the rate increase?
1:32:33
Unidentified No, this is just This is just This is just telling the Department of Health Health and the the auxiliary interview and environmental department to that we have received the consent administrative order. Uh the mayor has invited him to you all, and you all authorized him to to sign it. He's already signed them, but they wanted a secondary notice to make sure that
1:32:56
Unidentified Right, Council saw it.
1:32:58
Unidentified Right.
1:32:59
Unidentified Cuz there's some There's some expenses associated with complying. And that's part of the reason you need to know. But the equipment you authorized the landfill to get is part of that consent administrative order. So.
1:33:14
Roll call Roll-call vote — Maxine Miller: yes; Don Etherly: yes; Dr. Kyle Miller: yes; Monica Davis: yes. Clerk's count: 4 yes.
1:33:27
Unidentified Now, your agenda was just for the water rate study tonight. You You have some agendas that haven't been addressed, and we need to figure out when you want to meet to address those. And I believe Miss Miller may have had a question she wanted to address before we leave tonight.
1:33:45
Unidentified Um the officers are here. Can we have
1:33:49
Unidentified I thought the officers are here.
1:33:50
Unidentified Are they here?
1:33:51
Unidentified I think they were.
1:33:53
Unidentified I want officers Pause for a second. Before you all take up anything leading to the officers, I'll to you that Roxanne Ms. Lee desires for
1:34:01
Unidentified Well, you know what she desires, your order to be in Little Rock on Monday the
1:34:04
Unidentified 8th. Okay, for a settlement conference on the case.
1:34:08
Unidentified Okay, is it related related to offices?
1:34:10
Unidentified No, it's not related to offices. But, I I think one of the things about it is I think we need to wait to discuss anything about the offices after you go to that settlement conference. Okay. This is Now, we settle
1:34:25
Unidentified Is this Is this related to the against the county? Is it Is related to the city? It is
1:34:29
Unidentified Barbara Marshall versus Bobby Jones and the city of Helena-West Helena.
1:34:33
Unidentified Okay.
1:34:35
Unidentified Okay, and what happens if we cannot make it?
1:34:38
Unidentified Well, we are ordered to be there. And the And the And the The judge That's why they called the city to make sure that everybody There was There was settlement called and they wanted Roxanne Ms. Lee to represent the city on that. And they were trying to to see do we have a quorum available to be there? Uh because
1:34:55
Unidentified Can you do it via phone like you did the last time?
1:35:00
Unidentified I don't know, but I know they wanted a quorum there at the in Little Rock.
1:35:06
Unidentified What time?
1:35:08
Unidentified I believe it was at 9:00.
1:35:11
Unidentified 10:00.
1:35:13
Unidentified Do we have it?
1:35:19
Unidentified I can probably make it.
1:35:24
Unidentified I would follow up maybe to see if you could appear by phone.
1:35:28
Unidentified Okay.
1:35:31
Unidentified Yeah, if we could possibly by Zoom or something like that.
1:35:35
Unidentified I would I would have them check it with the judge.
1:35:37
Unidentified What time did you want to do it by?
1:35:41
Unidentified Remember when we did it by phone? Are you on the phone?
1:35:45
Unidentified Don, can you do that?
1:35:47
Councilman Don Etherly (Ward 3)° I'm sorry.
1:35:47
Unidentified Can you do that?
1:35:48
Councilman Don Etherly (Ward 3)° Yeah, I'll I'll do that.
1:35:49
Unidentified Okay.
1:35:51
Unidentified If I can do that, I'll be there.
1:35:52
Unidentified That's two people.
1:36:05
Unidentified I don't know what I'll be doing but the district called all of us the other day trying to call all of us.
1:36:12
Unidentified But as it relates to that, I can't tell you here the discussion related to the other
1:36:23
Mayor Christopher Franklin And before we before we adjourn, I want to tell you all this. I know we have a tough road ahead of us. But I want you all to to be with me. I'll be with you all on this road. I know it seems hard. I know it's some things that hadn't been done in the past. We can't go back and change the past. But we got to make this a better hellman for the people that's going to come after we leave. We got babies. We got young folks. We're here to make decisions that's best for this community. And I know it hurts. My mom was 70 years old and on fixed income. We we we a lot a lot of folks in there on fixed income. But we got to look at what's best for the hellmans. We do our part and show them that we're trying to make it better. Who knows by us working together doing this what business can land in our lap. They have to see us working together in spite of it all. We need water. And we when I see this state function, we we want everybody to have the necessary needs in this community. We have to go through this together. I'll roll up my sleeves and take the needle and I'm with you cuz it's going to be painful but it it we have to do it and I want you all to see the the finance and everything that comes with it. I want you all to know that we're in this together. I'm not going to say what they did, it's we did. It's collective effort. So, I want you all to know to know that whatever decision we make, we make them together as a team. I don't want you all to be out out in the dark. Smell if you want to be interviewed or whatever what we do. We're going to do this together cuz I I want as I said and I want you all to say, "He did work with us." He didn't fight when you resist. I want I want to work with you all to make this community better. With that being said, I promise you all that if you all want a further to be participating process of inviting you, you all can go in the executive session for hiring, firing, promotion, and demotion. So, if we got to the point where you all want to discuss it within the body, you all you all can feel free to do that and that wouldn't be a violation of the FOIA. Cuz I want you all I want you all to trust trust me on this. Trust the decision we make together. With that being said, meeting adjourned.
How this page was made: built from the city's own meeting video (YouTube ↗) and its posted meeting packet (Drive folder ↗). Dollar figures are quoted from the documents; nothing here is paraphrased from memory. Corrections: cheekforhelena@gmail.com.