Studies assess cost to extend Little Rock amenities

At issue is tab to provide services beyond city limits

Capital improvements and public safety would be the big initial costs, two studies show, as Little Rock looks at what it would take to provide city services to two areas outside the city limits but within city zoning control.

The city and its sewer authority ordered the studies in 2018 in response to a bill discussed in the state Legislature the previous year that would have mandated that cities extend sewer service to extraterritorial jurisdiction areas if a property owner requested it.

The studies were commissioned so the city will be armed with numbers if it is asked to provide services in the future. The studies will be presented to the city Board of Directors this month.

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.

Each area has a population of about 10,000, according to Metroplan, the long-range planning agency for central Arkansas. The areas currently receive no city services. Occupants are not city residents.

One study was completed by consultant Tischler-Bise and provides three estimates of potential costs of extending city services, including police, fire, trash and road services to those areas.

The other was completed by Garver LLC on behalf of the Little Rock Water Reclamation Authority and assesses what infrastructure would be needed to provide sewer services to areas the utility does not currently serve.

THREE WAYS TO GROW

Both studies evaluated the cost of providing services based on three models of possible growth patterns for the areas.

The first model determines the cost to extend 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 assumes that growth would encourage more people and jobs to locate in the areas if sewer service was available. It assumes two times more growth than the baseline growth model.

The third 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 and whether that would lower the cost to provide services. It assumes the same amount of growth as the market-driven model.

A map and information about the costs of services outside the city of Little Rock.
A map and information about the costs of services outside the city of Little Rock.

RESULTS

The study of extending city services other than sewer bases its cost estimates on Little Rock's 2018 budget. Its time frame is 2018-40. It does not assume annexation, but it does provide numbers on the fiscal impact if annexation does yield revenue.

Capital expenditures would include upgrading and maintaining roads, as well as adding code enforcement services and neighborhood resource centers. The study also states that at least two new fire stations would be needed in the western area and one new station would be needed in the southern area. A new police substation and patrol division would be needed in each area.

"This was primarily a cost-to-serve study, so it's really focused on the expenditures -- what it would cost the city to serve this area if you were required to provide services in the ETJ [extraterritorial jurisdiction areas]," said Julie Herlands, the lead Tischler-Bise consultant on the study. "Public safety costs really drive the results. That is a major proportion of the city's budget today."

Overall, the potential revenue from annexation is not enough to cover the operating and capital costs of extending those services, the study states. Following the second or third growth pattern does not affect that result.

Little Rock Planning Manager Walter Malone said the city could break even once it gets through the initial cost of ramping up services.

"If you get revenue, it will probably pay for itself or come close to paying for itself once you're there," he said

But, he said, the period through 2040 that the study evaluates is just a "snapshot."

"In the real world, all costs and revenues would not be confined within that 23-year period," Malone said.

The sewer study estimates the number of new pump stations and miles of sewer pipe that will be needed to serve unsewered areas. Following the baseline growth pattern, infrastructure costs total $159 million, and top $190 million following the other two growth patterns, according to the Garver study.

That study also includes the utility's basin service area, an area outside the extraterritorial jurisdiction that the utility would be able to serve because of gravity.

Those numbers would likely need to be updated if the utility does end up serving those areas in a few years, Garver Chief Operating Officer Michael Graves said.

ONGOING CONVERSATION

The studies were commissioned in response to a bill the state Legislature discussed in 2017 that the city board planned to oppose if it was refiled in the coming legislative session.

House Bill 1549 was initially filed by Rep. Andy Davis, R-Little Rock, who said he does not plan to refile it this year. Davis said he didn't want to force the issue with legislation but that he wanted to continue a discussion about how to serve those areas.

"This is kind of part of an ongoing conversation to provide sanitary sewer service outside the city," said Davis, who serves a constituency mostly outside the Little Rock city limits.

But Ward 5 City Director Lance Hines noted at the Water Reclamation Commission meeting in December that the state Legislature is generally becoming more pre-emptive of municipalities.

"What we're looking at is, if we don't take some kind of action, we may be pre-empted by the state Legislature," he said.

Metro on 01/02/2019

Upcoming Events