Ark. Code Ann. § 14-235-223 (2026)
Rates and charges for services — Lien
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- The council of the municipality shall have power, and it shall be its duty, by ordinance to establish and maintain just and equitable rates or charges for the use of and the service rendered by the works, to be paid by each user of the sewerage system of the municipality.
- The council may change and readjust the rates or charges from time to time to such extent as will not render insecure the rights of the holders of revenue bonds or violate any sinking fund agreement, or other lawful agreement, with such bondholders.
- The rates or charges shall be sufficient in each year for the payment of the proper and reasonable expense of operation, repair, replacements, and maintenance of the works and for the payment of the sums required in this subchapter to be paid into the sinking fund.
- Revenues collected pursuant to this section shall be deemed the revenues of the works.
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- No rates or charges shall be established until after a public hearing, at which all the users of the works and owners of property served or to be served by them and others interested shall have opportunity to be heard concerning the proposed rates or charges.
- After introduction of the ordinance fixing the rates or charges, and before the ordinance is finally enacted, notice of the hearing, setting forth the proposed schedule of the rates or charges, shall be given by one (1) publication in a newspaper published in the municipality if there is such a newspaper, but otherwise in a newspaper having general circulation in the municipality, at least ten (10) days before the date fixed in the notice for the hearing, which may be adjourned from time to time.
- After the hearing the ordinance establishing rates or charges, either as originally introduced or as modified and amended, shall be passed and put into effect.
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- A copy of the schedule of the rates and charges established shall be kept on file in the office of the sewer committee having charge of the operation of the works, and also in the office of the municipal clerk or recorder, and shall be open to inspection by all parties interested.
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- The rates or charges so established for any class of users or property served shall be extended to cover any additional premises thereafter served which fall within the same class, without the necessity of any hearing or notice.
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- Any change or readjustment of the rates or charges may be made in the same manner as the rates or charges were originally established as provided in this section.
- If the change or readjustment is made substantially pro rata as to all classes of service, no hearing or notice shall be required.
- The aggregate of the rates or charges shall always be sufficient for the expense of operation, repair, and maintenance and for the sinking fund payments.
- If any service rate or charge established shall not be paid within thirty (30) days after it is due, the amount of it, together with a penalty of ten percent (10%) and a reasonable attorney's fee, may be recovered by the sewer committee in a chancery suit, filed in the chancery court of the county where the works, or the greater part of them, shall be located, in the name of the municipality or in the name of the trustee under the indenture securing the revenue bonds, or in the name of the bondholders, to such extent as their right to sue in their own name may be permitted under the trust indenture.
History. Acts 1933, No. 132, § 13; Pope's Dig., § 9989; Acts 1985, No. 290, § 1; A.S.A. 1947, § 19-4113.
Cross References. Rate-making authority, § 23-4-201.
Case Notes
In General.
This section is not objectionable as requiring the owner to discharge another's obligation. Jernigan v. Harris, 187 Ark. 705, 62 S.W.2d 5 (1933).
Illegal Extraction.
Stormwater utility fee was not an illegal extraction because subdivision (a)(1) of this section did not state that the fee had to be paid by any beneficiary, whether intended or unintended, of the sewerage system, and the code did not define “sewerage system” to distinguish between the wastewater sewer system and the stormwater sewer system. Morningstar v. Bush, 2011 Ark. 350, 383 S.W.3d 840 (2011).
Late Fees.
When subdivision (a)(1) of this section is construed liberally, as § 14-235-202 instructs, cities have the implied authority to establish a late fee as a “rate or charge” under this section. Davis v. City of Blytheville, 2015 Ark. 482, 478 S.W.3d 214 (2015).
Summary judgment was properly granted to a city because a water department's charging of late fees on overdue accounts pursuant to ordinances was not an ultra vires act; there was implied authority to establish a late fee as a rate or charge. Davis v. City of Blytheville, 2015 Ark. 482, 478 S.W.3d 214 (2015).
Subsection (h) of this section and § 14-234-602 do not limit the administrative power of a municipality to levy a fine or penalty against a person who has not paid his bill for water or sewer services as the exclusive remedy. Rather, these statutes give municipalities the additional authority to file suit in court and seek attorney's fees in litigation concerning the collection of those delinquent accounts. Davis v. City of Blytheville, 2015 Ark. 482, 478 S.W.3d 214 (2015).
Late fees charged by city water department on overdue accounts were not usurious, unreasonable, or an unconscionable penalty, and the statutory limits on penalties for violations of ordinances, set out in § 14-55-504, were not exceeded. Davis v. City of Blytheville, 2015 Ark. 482, 478 S.W.3d 214 (2015).
Notice.
Notice published 10 days before enactment of ordinance establishing rates for use of proposed sewage disposal plant is sufficient to advise property owners how they would be affected by the proposed rates. Carpenter v. City of Paragould, 198 Ark. 454, 128 S.W.2d 980 (1939).
Penalty.
Provisions if any service rate or charge should not be paid within 30 days after due a penalty and reasonable attorney's fee may be recovered by the sewer committee is penal in its nature and must be strictly construed; therefore the trial court will be granted a reasonable discretion in denying or allowing such penalty depending on the circumstances. Lamar Bath House Co. v. City of Hot Springs, 229 Ark. 214, 315 S.W.2d 884 (1958), appeal dismissed, 359 U.S. 534, 79 S. Ct. 1137 (1959).
Publication.
There is no constitutional provision or amendment which would allow a city to ignore this section and § 14-55-206 when establishing or changing its sewer rates. Invalidity of municipal ordinance for failure to comply with this section and § 14-55-206 was not cured by subsequent publication of ordinance. City of Ft. Smith v. O.K. Foods, Inc., 293 Ark. 379, 738 S.W.2d 96 (1987).
Rate-Making.
Ordinance establishing rates for the use of proposed sewage disposal plant was held properly enacted though introduced at a special meeting of the council not called for that purpose. Carpenter v. City of Paragould, 198 Ark. 454, 128 S.W.2d 980 (1939).
Rate-making being a legislative act, unless the city council has acted arbitrarily and unreasonably in fixing its rates, there is a prima facie presumption in favor of their correctness, and the burden is on complainant to show otherwise. Lawrence v. Jones, 228 Ark. 1136, 313 S.W.2d 228 (1958).
City did not have alternative authority to change its sewer rates under § 14-200-101 et seq. and ignore the pre-enactment notice and public hearing requirements of this section. City of Ft. Smith v. O.K. Foods, Inc., 293 Ark. 379, 738 S.W.2d 96 (1987).
Referendum.
The action of a city council in enacting sewer ordinances is legislative and therefore subject to a referendum and the vote of all the electorate as a city under Ark. Const. Amend. 7. Lawrence v. Jones, 228 Ark. 1136, 313 S.W.2d 228 (1958).
Refunds.
Customers were entitled to refund of all the increased sewer charges paid pursuant to a municipal ordinance which was invalid because the city failed to comply with the requirements of this section and § 14-55-206. City of Ft. Smith v. O.K. Foods, Inc., 293 Ark. 379, 738 S.W.2d 96 (1987).