Benton Public Utilities panel considers sewer fee options
By ROBERT SHEARON Staff writer

People developing Benton businesses in the Alcoa Exchange area may be in for an unpleasant surprise when they go to get sewer services, according to the Benton Public Utitlies Commission.

The commission met last week to discuss a resolution that was approved Dec. 9, 2002, by the Benton City Council.

The agreement allows Rolin Park LLC and Tuley Development Group Inc. to collect fees from users who tie on the the 12-inch sewer line the two companies installed in the area.

Instead of a flat fee, the fee is based on one of two formulas, which commission member Leroy Allen termed "unusual."

One formula bases the fee on the number of acres that will be served. The formula is $1,176 x 1.1N multiplied by the number of acres. N is the number of years and partial years since Jan. 1, 2001.

The second formula is based on the estimated gallons per day that will be used. The formula for that is the total estimated gallons per day, divided by 1,500, with that result multiplied by $1,176 x 1.1N, with N again being the number of years and parts of years since Jan. 1, 2001.

Chili's restaurant tied on using the gallons per day formula and paid a fee of $6,944.52, on top of the regular fee charged by the city, which at that time ranged from $300 to $700, said Terry McKinney, general manager of Benton Utilities.

McKinney said the current fee is now $1,000 for businesses to tie on to the city's sewer system.

McKinney told the commission that city attorney Brent Houston is looking at the contract to see if there is a way around it.

In an interview after the meeting, McKinney said the city might have to look at some other options if the resolution can't be invalidated. Although reluctant to specify what those options are, when specifically asked about the city building it's own sewer system, he admitted that was one possible scenario.

McKinney said the utility department was alerted to the situation two weeks ago when John Selig of Rolin Park LLC sent a letter to Dewayne Hood about the resolution. Hood is construction manager for Benton Utilities.

Selig attached a copy of 2002 resolution and the agreement between Rolin Park and Tuley Development Group regarding fees for connecting to the sewer system.

In his letter, Selig mentioned that Chili's had paid the formula-based fee and added, "We now want to assure the same is done for the other properties whose discharge will go through the line."

In a telephone interview Friday, Selig said he was surprised the commission had concerns about the agreement. "The city worked with me on the agreement," he said. "They though it was a reasonable agreeement. If the city has some concerns I'm sure they'll contact us, but they haven't so far."

Selig said the sewer runs from Arkansas 5, down Interstate 30 a short way, then runs to he sewer plant at Hurricane Lake.

Selig said he didn't remember how much the sewer line cost to build.

He said he the sewer agreement was the only one he'd ever done.

When asked if he would consider selling the line to the city, he said, "I haven't thought about it."

City Attorney Brent Houston said he had met with an attorney for the developers, and had asked that the they name a specific figure that will recover their cost in the sewer, instead of relying on the formula. Houston said the way the contract is written the debt wouldn't be paid off until 2022.

Houston said the developers appear to have paid between $115,000 and $200,000 for the sewer, and repayment "will go beyond the normal rates of return on investment due to that money multiplier."

Houston said he hoped to hear back from the developers this week. Otherwise, he said the city may have to look at putting in its own sewer line to bypass that one. He said the city maintains the sewer line.