Little Rock looks at expense of services out of city

Studies respond to state proposal

By midsummer, Little Rock will be armed with three estimates of potential costs if the city were to provide services to two areas outside city limits that are within Little Rock's zoning control.

The numbers will be included in a draft report by consultants that will be released within the next two months to allow for citizen and community feedback before a full and finalized report is delivered to the Little Rock Board of Directors in September.

The board ordered the study of the cost of providing services to its extraterritorial jurisdiction areas so it would be prepared with facts when it opposes a bill expected to be re-filed in the state Legislature next year.

Last year, a bill was discussed that would have mandated cities to extend sewer service to extraterritorial jurisdiction areas if a property owner requested it. In addition, the city would have to pay for the infrastructure and sign a pre-annexation agreement with the property owner. The bill did not become law, but it is anticipated to resurface next year.

The bill appeared after the Little Rock Board of Directors voted down developments in its extraterritorial jurisdiction because of opposition to sewer package plants -- private miniature sewer treatment plants that are put in by developers in areas where there is no access to city sewer services.

In addition to the city study, the board ordered the Little Rock Water Reclamation Authority -- the city's wastewater utility -- to also study the cost and effects of extending sewer service outside city limits. That study is ongoing and is expected to be complete by September. It is separate from the city study, but both consultants are collaborating on the studies.

Little Rock's extraterritorial jurisdiction consists of a 3-mile area outside the city's western limits and another area on its southeastern border, in which the city exerts zoning authority to anticipate growth and annexation.

The areas receive no city services. Occupants are not city residents.

"The city isn't going out proposing to provide the services. The city wants to be able to go to the Legislature with something more than, 'Oh my God. Are you kidding me? This is going to bankrupt us.' So that's the motivation of this study, in all honesty," Little Rock Planning Manager Walter Malone said.

The city's consultants, Tischler-Bise Inc., are configuring three cost models. The city contracted with the firm for $223,470 to complete the study.

The first model will determine the cost to extend city services -- including police, fire, trash and road services -- based on Metroplan's estimate of how much the areas will expand by jobs and population over the next 20 years under current laws and regulations.

The second model will take into account how that growth might increase if the state were to enact a law mandating the city provide sewer service when developers request it.

"If we are going to provide these services, some development that would have [gone] to Saline County or northern Pulaski County will instead come to these areas," Malone said. "So, we up the population and employment that go to these two areas in the second model because it would now be less costly to develop there."

The third model does the same as the second, but it also takes into account the possibility that the city could incentivize business and housing growth in certain areas -- for example, areas closer to a fire station -- and whether that would lower the cost to provide services.

Community activist Jim Lynch said at a recent city presentation updating the community on the study that its outcome could affect how Little Rock looks at annexation in the future.

"If you get sewer, you're going to have an explosion out there," he said. "Then the question is, how do you pay for it? We've got to have these numbers available to us to be rooted in some kind of intelligent discussion."

Developer Wayne Oz Richie asked why the city wouldn't be able to pay for the increased services with the extra tax dollars coming from new city residents who are annexed in.

One of the consultants said the tax rate hasn't kept up with the demand of services, and the study plans to determine whether there are sufficient revenue sources to cover the expenditures.

"If Little Rock can't grow, we might as well hang a shingle up and close for business. We're Chattanooga. We might as well be closed for business," Richie said, referring to the Tennessee city that lost 10 percent of its population in the 1980s but was able to recover by 2010, partly through annexation.

Lynch countered.

"The question is not if we are going to grow, it's going to be how do we pay for it? If Scenario No. 2 [a state law mandating city-provided sewer service] were to happen, we can't pay for it. There's no way we can pay for it," he said.

Metro on 05/27/2018

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