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City ready to float bond for sewer repairs

Project will come with $30 million price tag, say West Memphis officials

Project will come with $30 million price tag, say West Memphis officials


Project will come with $30 million price tag, say West Memphis officials


The time has come.TheWest Memphis Utility Commission has been told it was time to come up with big bucks to fix the sewer system in the city. The Arkansas Department of Environmental Quality (ADEQ) put the city utility company on notice mandating massive repairs and improvements to the system. The utility spent the last two years studying the problems and developing solutions. A $30 million construction plan to expand and rehabilitate the waste water treatment plant along with repairing manholes and sewer lines in the city to prevent storm water from overwhelming the plant during storm events became central to considerations. Commissioners heard the bond proposal details during the October meeting.

The ADEQ had cited the city, which self reported bypassing water treatment during a handful of storms in recent years. Untreated water was dumped into the Mississippi River because the plant exceeded capacity. The treatment plant needed upgrades and expansion including massive filters. Increased capacity was found necessary for the city add new business customers and housing.

Stephens Vice-president Michael McBryde presented bond financing for commissioners to consider. In order for construction work to finish in time to satisfy the ADEQ the bond was set to be heard by city council in January next year. The bond money would be on hand by February 25, 2021. McBryde laid out a timeline.

Preparing and marketing the bond offering to investors was set to begin in December. The bond would come before city council for Consideration on January 25.

The utility already launched some repairs. City council previously adopted provisions for those projects to be covered under the bond once it was issued.

The bond would come at a premium. Additions to the $30 million construction project included a reserve fund and and costs to issue the bond. The total package could cost as much as $31,366,022. With an assumed interest rate of 2.74 percent the total principle and interest figured to cost utility customers $46 million spread out over thirty years.

Utilities manager Todd Pedersen recapped the bond proposal for commissioners.

“What I am seeking is to get a 30 million construction fund not to exceed $1.6 million payments annually,” said Pedersen.

Commissioners restated the request in the form of a motion and unanimously adopted the plan to pursue funding with a bond from Stephens.

The utility planned to subsidize much of the work from money generated from electric bills. Ultimately the commission planned to propose rate increases for the sewer improvements. The initial ideas included gradual rate increases over the next few years to cover the mandated improvement costs. Rate discussion were set to begin in earnest during the commission’s November session.

West Memphis Utility rates ranked as a bargain among other municipal utility charges in the state. Commissioners already discussed aiming to remain among the lowest rates in the state but high enough to retire the bond on time. Water and sewer rates had not increased in over 30 years for customers.

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