WM to float $30 Million sewer and water bond
Funds will pay for massive repairs to city’s dilapidated, outdated systems
By JOHN RECH
Saddled with an Arkansas Department of Environmental Quality Corrective Action Plan, the West Memphis Utilities presented costs to repair and improve water and sewer infrastructure to city council. Utility commissioners met aldermen in a joint session as Utilities General Manager Todd Pedersen and Assistant Manager Ward Wimbish presented the scope of work and requested a $30 million bond issue to pay for required repairs and upgrades. The pair said graduated rate increases for West Memphis utility customers would follow to pay off the bond.
Mayor Marco McClendon asked what would happen if city council nixed the plan.
“If they don’t approve the bond issue the ADEQ will fine us at the end of the administrative order,” said
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Pedersen. “We must report to ADEQ on how we are doing against the plan.
The city would still owe the work under the consent order it signed with the state and be under heavy fines above the $30 million improvement price tag. The city must finish the work by the end of 2023.
The city must reduce rain water infiltrating the sewer lines, add capacity to the waste water treatment plant, improve effluent pumping stations, and address the sink holes that dot the south side of the city. The sewer plant has bypassed treatment and discharged straight into the river during major storm events. For the city to continue economic development the sewage treatment plant must expand.
The utilities losses money on water every month, down $385,000 last year. The city water rates are the cheapest in the country. In fact the combined charges for electric power, water and sewer are the lowest in the state. A modest rate increase could pay off the bond and still rank the city utility near the bottom for customer rates. The city hadn’t raised water and sewer rates in thirty years.
“As Councilman James Pulliaum is fond of saying, everybody knows West Memphis is the most cost effective city anywhere,” said McClendon.
“We are looking at graduated increases over the next three years and then going to rate increases based on the consumer price index capped at two percent per year,” said Wimbish. “We’d increase it five percent over the next two years before capping it at two percent after that.”
The projected increases kept the city in the bottom five for utility customers in the state and came in under the rates Jonesboro charges. Planners touted the utility rate advantages remained for West Memphis in economic development competition with Jonesboro.
Councilman Tracy Catt told utility management he would conduct a cost benefit analysis on paying off the bond in a shorter time to save interest charges. The bond proposal provided three payback term options.
“I’ll have to consider any prepayment penalties,” said Catt.
His Ward 1 counterpart James Holt gave the green light.
“This has needed to be done a long time ago,” said Holt. “We shouldn’t put this off. It must be done.”
The utility went back to work on the bond terms and planned to have it next heard before city council in January.