Bentonville City Council discussed water and wastewater rates at a workshop Monday night, reviewing increased operating costs that could potentially lead to higher rates for customers as early as the first quarter of 2025.

The city contracted with Raftelis Financial Consultants, Inc. — a consulting firm for local governments and utilities — to perform the rate analysis. Raftelis has been analyzing the information provided by the city concerning water, wastewater and sewer operating expenses and future capital needs in order to recommend a financial plan. 

The information presented to the City Council on Monday was a preliminary report provided to gather feedback. 

Collin Drat, senior manager with Raftelis, told the City Council that the goal is for the rates to be as low “as the best service will allow” while still supporting the delivery of safe and reliable services. Bentonville’s current water and sewer rates are slightly below the national average, although higher than Fayetteville, Rogers and Springdale.

“We deliver a service that’s an incredible value to our customers and we want to be able to continue to do that into the future, and the rates are an important part of that discussion,” Drat said.

Why Rates Could Go Up

In 2020, Raftelis did a study and recommended a 4% water rate increase per year from 2021 to 2024, which was adopted for 2021 only. However, Bentonville’s water rates are also adjusted when the city’s water provider, Beaver Water District, increases its rates. In 2022, the company recommended a 5% wastewater rate increase per year from 2023 to 2028, which was adopted for 2023 and 2024. 

The city has significantly increased infrastructure needs in regards to water compared to their previous study, and Drat said that the city’s recent updates to its 2018 master plan have allowed them to more accurately predict needs in the future.

Raftelis’ analysis looks at future infrastructure needs, increased operating costs due to inflation, increases in salaries for employees, and additional positions that will possibly be needed as the city grows. 

Current water rates do not fully cover the amount of “non-revenue water,” Drat said, which is water purchased from Beaver Water District but not sold to customers — mainly due to water leaks in the system. 

The amount of non-revenue water has increased substantially since Raftelis’ previous study. In 2019, 42% of the city’s purchased water was lost, while current water loss stands at 56%. Typical industry standards for water loss levels hover around 15%.

Mike Bender, city public works director, said his department has been working on meter issues and has fixed over 600 leaks this year. Drat said the financial plan works off the goal of reducing water leaks to 45% by 2025, 30% by 2026, and then 1% less each year thereafter. 

Raftelis plans to present their final rate recommendations to the City Council in early 2025 for a potential rate adjustment.

“On the water side especially, it is very important that we probably make an adjustment as soon as we can,” Drat said. “Knowing that whatever we do, we’re going to be working on the other side to address the non-revenue water issue as well as any metering issues. … If things look a little better, maybe years two, three, four, five look better, we adjust from there.”