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The Arkansas Natural Resources Commission last week approved up to $7.1 million in loans to suburban wastewater districts after discussion on how to prevent the districts from needing the money in the first place.

Two loans will go to Washington County Property Owners Improvement District No. 5, one of up to $3.6 million from the Arkansas Water, Waste Disposal and Pollution Abatement Facilities General Obligation Bonds Fund and another of up to $1 million from the Water, Sewer and Solid Waste Fund.

The loans will be used to connect a sewer line from Farmington to Prairie Grove after the district experienced sewer overflow problems and a lack of funds forced it into receivership in 2015. The district, which has 490 customers, received a loan of up to $1 million last summer to plan and design the sewer line.

The $3.6 million loan is for 32 years at 4.25 percent interest with interest-only payments for up to two years, according to a commission summary of the loan.

The $1 million loan is 30 years with deferred payment on principal for five years and interest waived for five years. The remaining 25 years of the loan will have a 5 percent interest rate.

For both loans, the district must maintain a 3 percent depreciation reserve fund.

After hearing the presentation for the Washington County district, commissioners expressed dismay that the system in a private subdivision needed to be bailed out and that residents were not already connected to municipal wastewater.

Jerry Hunton, the commission's vice chairman and a former county judge for Washington County, said county planning policies should prevent problems like the ones the district faced. The plant should have been built with a future connection to Prairie Grove in mind, he said.

"It's all about money," Hunton said. "It's all about money, and who's going to foot the bill and who's going to solve the problem down the road."

But commission Chairman Fred Fowlkes of Vilonia said requiring countywide planning would be "a major deal."

The commission also approved a loan of up to $2.5 million for the Sewer Improvement District No. 211 in Pulaski County. The district, which has 1,403 customers, operates just outside of Sherwood. It plans to use the funds to replace sewer lines and manholes and to improve levees at the plant.

Commissioners also approved increasing financial assistance for ongoing projects with four other entities and an emergency grant of $20,600 to Lake View, which has 268 customers in Phillips County, to restore water service to the town's residents.

Marshall, with 1,127 customers, will receive an increase of up to $800,000 in a loan to be immediately forgiven for a drinking water project; South Pike County Water Facilities Board, with 307 customers, will receive up to $60,000 in a loan to be immediately forgiven for its drinking water project; Cotter-Gassville Joint Sewer Commission, with 1,200 customers, will receive a loan of up to $30,000 over 10 years with 2.75 percent interest for a project replacing ductile iron sections and regrading sewer lines; and Ravenden Springs, with 71 customers, will receive a grant of up to $206,000 for water tank rehabilitation.

State Desk on 03/25/2018

Print Headline: Panel OKs $7.1M in water loans

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