North Little Rock will issue $30 million in sewer revenue bonds to pay for improvements and extensions to its wastewater system, the City Council unanimously approved Monday night.
Issuance of the bonds has been expected for months. The City Council had already approved in February its intent to issue the bonds. That action was to comply with Internal Revenue Service requirements, City Attorney Jason Carter said at the time.
"We had a presentation on this months ago," Mayor Joe Smith reminded aldermen.
Aldermen approved the ordinance, 7-0, with Alderman Maurice Taylor absent. The council voted without discussion.
The Arkansas Development Finance Authority will purchase the tax-exempt bonds through a loan assistance program by the Arkansas Natural Resources Commission.
The interest rate will be 1.25 percent, with an additional 1 percent annual fee to the state Development Finance Authority as a servicing fee, according to the legislation.
Bond payments will be $935,505, paid semi-annually beginning Oct. 15, 2020, the legislation said. The city's repayment term will be 20 years.
The bond issue will be supported by revenue from a series of sewer-rate increases already in effect. Bills to North Little Rock Wastewater customers increased by 8.1 percent Jan. 1, with more increases to come over the next four years. The five-step increases will include rates rising 8.2 percent in 2017, 6.2 percent in 2018, 5.3 percent in 2019 and 4.9 percent in 2020. The increases will take effect Jan. 1 of each year.
"This loan is largely for the rehabilitation of our collection system for the purpose of eliminating sewer overflows," MarcWilkins, executive director for the North Little Rock Wastewater Department, told the City Council.
The City Council approved the rate increases in October.
The rate increases stem from the utility's compliance with a 2011 consent decree from the Arkansas Department of Environmental Quality to correct frequent sewer overflows. The state agency allowed the city 10 years to resolve the issues.
The utility approved a master plan in 2011 to deal with the sewer problems. The rate increases for its next phase of capital improvements are to address the issue, Wilkins has said.
North Little Rock Wastewater has about 40,000 ratepayers since adding service for neighboring Maumelle in the spring, Wilkins said before the meeting. The utility also has Sherwood customers.
Metro on 09/13/2016