In real estate, location can mean everything. Apparently that is true also for customers of Central Arkansas Water. People who live in Little Rock and North Little Rock get the standard rates but in rural areas and in the city of Sherwood, they pay 60 percent higher rates.
For example, residents in the North Hills Boulevard area pay differing rates depending on if they live in North Little Rock or Sherwood, depending on which city incorporates them. The system makes some residents on one side of various streets pay 60 percent more for water service than their nearby neighbors.
That practice since the creation of Central Arkansas Water about a dozen years ago has been accepted since CAW was created by the cities of Little Rock and North Little Rock; however, Sherwood city leaders are hoping CAW will change that practice.
At CAW’s board monthly meeting on Jan. 11, Sherwood Mayor Virginia Hillman and council members Ken Keplinger, Tim McMinn, Charles Harmon, Mary Jo Heye and Marina Brooks were present and asked to appear on the water board’s agenda to address the issue.
"They have come today to talk to the board regarding the rate differential with the city of Sherwood and the rates in Little Rock and North Little Rock," said CAW Chief Executive Officer Graham Rich.
Rich informed board members that in December CAW officials held a public hearing about an impending water rate hike that was planned for the spring of 2013.
"We do this every time we raise rates," Rich said. "There was a representative from Sherwood who asked why Sherwood residents pay different rates."
Rich said he received a letter from Hillman asking CAW why her constituents are paying 60 percent higher residential rates than North Little Rock/Little Rock residents.
Rich said he met with Hillman at Sherwood City Hall and recommended she and city aldermen begin a dialogue with CAW and see if a change in the rate differential could be implemented.
Rich said when CAW was set up about 12 years ago its organizers, which were the cities of Little Rock and North Little Rock, decided to charge residents of those two cities an identical residential water rate. However, every customer outside of those two municipalities would be charged a 60-percent higher amount.
"There was a rate differential with Sherwood and others outside of the cities of Little Rock and North Little Rock in the consolidation agreement," Rich said.
Hillman said there have been a lot of changes in Sherwood during the past dozen years and there is no need to charge city residents in her town more than Little Rock or North Little Rock customers.
"It should not cost any more to provide water service to Sherwood than it does in Little Rock or North Little Rock," Hillman said. "We feel it is a good time for you to consider our request to review the rates, or at least make them closer. We feel that is a fair question today."
Board member Roby Robertson said CAW the water utility that provides water service to the cities of Little Rock and North Little Rock.
Harmon said Sherwood should not be charged as large a rate as rural CAW customers because the cost to providing the service in his city is not as expensive as in rural areas.
Sherwood officials also pointed out that their city’s population is now about 30,000 that is close to being half the size of North Little Rock.
Harmon said he knows that during the days before CAW was created that the North Little Rock Water Department had held discussions with Sherwood about equalizing rates. However, once CAW was on the table to be created talk of equalizing rates for Sherwood was put on hold.
Hillman said she does not want to see the discussions deteriorate the relationship Sherwood has with CAW.
"I don’t want to come here and be contentious," Hillman said. "Every time there is a rate increase, this resurfaces. And our citizens come and ask us."
CAW Board member Eddie Powell said, "Are you asking to equalize the rates for all three cities? If you are that would involve a lot of other outside city customers. The staff would have to look at it."
Heye said CAW should consider creating urban/non-urban rates.
"We have had a lot of growth in Sherwood and our system is in better shape than a lot of areas in Little Rock or North Little Rock," Heye said.
Powell said CAW could look at the issue over time but lowering rates immediately would hurt the utility’s budget.
McMinn said, "I think any movement in the right direction would be a positive step for the citizens of Sherwood. You could decrease rates over a period of time. It would acceptable as long as it was moving forward. We appreciate that you are at least listening."