Helena council hears rate study that finds 73.5% water loss; adopts resolution acknowledging consent orders

Dennis Sternberg, a rate-study provider with Arkansas Water, told the Helena City Council on July 2 that the city’s water system is losing an unusually large share of treated water and needs both higher rates and immediate infrastructure work to remain solvent. "73.5% of your water is being lost in your distribution system," Sternberg said, citing production of 1,428,034,000 gallons and billed sales of 378,436,000 gallons in the 12-month period examined.

The study, prepared in compliance with Act 605 of 2021 and the Arkansas Natural Resources Commission rules, calculates Helena’s water breakeven revenue at roughly $3.13 million and identifies a $1,176,063 shortfall under current rates. Sternberg recommended phasing rate increases: a first-year increase that would raise the charge over the minimum to about $5.06 per 1,000 gallons (raising a typical 4,000-gallon inside-city bill by about $6.99 a month), followed by a second-year move to $7.39 per 1,000 gallons to reach full breakeven. He added the study assumes funding a refurbishment and replacement account equal to 5% of total revenues (about $97,763 based on reported numbers).

Sternberg also noted emergency and larger loans that affect planning: the city has a recorded $100,000 emergency loan (2.55% for 20 years) that was included in the calculations, and the Arkansas Natural Resources Commission has approved an $11,000,000 loan at 4% for 20 years that has not been drawn. He cautioned any additional borrowing would require re-running the rate calculations and underscored that accuracy depends on the quality of the data provided: "If you give us good information, we'll give you a good rate study."

Council members and public commenters responded strongly to the study’s chief finding — the high water loss rate. Multiple speakers urged rapid hiring of an engineer and contracting crews to repair leaks, and several said they would support rate increases despite the political difficulty. A council member urged: "Let's take this action and make sure we get these contractors and raise these water rates," linking higher rates to restoring contractor capacity and meeting compliance milestones.

City staff and the mayor highlighted compliance obligations tied to several consent administrative orders (CAOs) from state agencies that were discussed at a recent hearing and placed before the council. The CAOs include 90-day milestones to secure an engineer and licensed operators and set out compliance timelines and potential fines. To formalize the record, the council considered a resolution ratifying the mayor’s prior execution of four consent administrative orders.

Miss Miller moved to adopt Resolution No. 10, ratifying the mayor’s execution of the administrative orders; the motion was seconded and the council approved the resolution by roll call, 4 yes, 2 absent. The resolution notes receipt of the CAOs and documents the city’s intent to comply. Council members discussed scheduling a public hearing — required by state law before adopting sewer rate changes — and agreed to set notice and timing consistent with publication requirements so the hearing could occur at a later council meeting.

Officials repeatedly emphasized practical next steps: hire or contract an engineer to produce priority plans, recruit licensed water and wastewater operators within the 90-day requirement, and advertise rate changes with the statutorily required public notice. Mayor Franklin closed the meeting urging unified, expedited action so residents maintain water service while the city addresses aging infrastructure and collection shortfalls.

What happens next: the council adopted the resolution acknowledging the CAOs and staff will proceed with the advertised public-notice process and recruit engineers and licensed operators; the council did not adopt the rate ordinance at this meeting and scheduled further hearings and meetings to consider rate adoption and implementation.