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Why Bella Vista’s Water Rates Are Higher
as written by Board Chairwoman Roberta Dale - July 2009

There has been some concern expressed about why Bella Vista Village’s water rates are higher than surrounding areas, and there are many reasons why Bella Vista’s water customers pay more. 

Most of the surrounding communities buy their water wholesale directly from the Beaver Lake Water District. The surrounding communities were all members of the Beaver Lake Water District when it was formed more than 50 years ago. Bella Vista is not a member of the district.

Bella Vista is a purchase system, buying its water directly from the City of Bentonville. Bella Vista Village has a 20 year contract with the City of Bentonville, which in itself increases the cost of water to Bella Vista. By contract, the City of Bentonville has to assure that its system and any system improvement projects are built so they are able to deliver the water to Bella Vista.  

Figured into our rate are improvements to waterlines and elevated water storage tanks and maintenance for the system that insures the provision of water to Bella Vista. A few years ago, Bentonville installed much needed larger lines from the Beaver Lake Water District to accommodate the area’s growing needs. Bella Vista pays a portion of these costs, as well as line maintenance. Costs passed on to Bella Vista are audited through rate studies to assure that we are being charged only our share of the improvements.

The contract with Bentonville was a sole source contract, which prohibited Bella Vista from buying water from another supplier. In 2006, Bentonville agreed to allow Bella Vista Village to enter into a contract with another supplier to provide the west side of the village with water. A second supplier was needed as the growth in our area taxed the infrastructure of our current water system. At that time, Bella Vista Village was considering the prohibition of any further growth to the west side of the village due to the inability to provide water.

Even though Bentonville dropped the sole source language, Bella Vista Village is mandated through contractual language to purchase certain quantities of water from the Bentonville system through 2025. This was required as a condition to drop the sole source language. This requirement was needed to allow the City of Bentonville to plan and maintain a system that would meet the needs of both areas in the future.

At the time the sole source provision was dropped, Bella Vista Village entered into a contract with Benton/Washington Regional Public Water Authority, best known as Two Ton. Unlike the Beaver Lake Water District, Bella Vista Village is a part of the public water authority and pays the same rate as other purchasers of water from this system. Within the first year of the contract with Two-Ton, water rates were increased for all entities buying water from this system.

In calculating Bella Vista Village’s water rates the cost of both water systems are added together.

Aside from these two contracts, which deliver water to Bella Vista Village, we have more than 600 miles of water lines in the village. During the past several years, the association started waterline replacement upgrades to your water system. These costs had been deferred for years to keep from increasing the water rates. However, these upgrades and the associated costs could no longer be deferred.

To arrive at a daily charge for water all the cost are added together. These costs include getting the water to Bella Vista, line replacement, storage tanks, maintenance, water towers, operating labor, capital cost, etc. For those members who want additional, more detailed information, the percentage of the total cost going into each of these areas is shown in a pie chart at the bottom of this page.

You may ask, “So what do I pay?” For the first 1,500 gallons of water used the rate is calculated at 73 cents per day. All water used over and above the first 1,500 gallons is billed at $9.39 for each additional 1,000 gallons. 

In summary, Bella Vista Village’s cost components are similar to other neighboring water utilities. Our higher rates can be attributed to the pass through cost of our water purchase system and the long deferred line replacement and maintenance cost.

I hope this provides a little more background into Bella Vista Village’s current water rates and what contributes to those rates being higher than surrounding communities. Our current system of getting water to the village points out some additional hurdles we will have to face if the City of Bella Vista and the membership vote to accept a transfer of the water system. 

We do not know what the City of Bentonville or Benton/Washington Regional Public Water Authority will do in terms of their contracts with Bella Vista. We do not know if the city would accept the current contract provisions or what latitude there is for change. These issues will need further exploration.

In my last column I wrote about what needed to happen for the water to be transferred to the City of Bella Vista. I stated in that column that the POA currently sets water rates and if the city takes over the water system the final rate, taking into consideration all of those items I just listed, would be established by the Public Service Commission. This statement was incorrect. We, at the POA, have since learned that rates for resident and nonresident consumers of a municipal waterworks system shall be fixed by a legislative body of the municipality. The statute states that the rate must be adequate to meet standards as outlined in Arkansas State Code. I apologize for this error, as it is an important difference. Until we learn more it is still too early to determine if water rates would change – either increased or reduced – under a city-managed Water Department. The POA and the city have started to work through all of these issues, so we can provide our members with data to make an informed decision regarding the future of the water system.

 

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