$5.4M allotted to water districts

Arkansas natural resources officials on Wednesday approved $5.4 million in loans and grants to water and sewer districts and accepted more than a half-million dollars back from a levee district.

The funds are largely to repair or replace utility infrastructure at lower interest rates than a typical commercial loan, and the beneficiaries are smaller communities.

The Arkansas Natural Resources Commission voted to approve the disbursal of the funds with no opposition.

A loan of up to $3 million would go to Lewisville to repair deteriorated water mains that are leaking water before it reaches customers. The city would have to approve the terms of the loan before accepting the money, said Stephen Nutt, the city's water superintendent.

Nutt said he didn't know the percentage of water lost before reaching customers but "we're having quite a few issues."

The south Arkansas town of about 1,000 people has 551 individual customers, which prompted commissioners to question how the commission determines whether a loan can be feasibly paid back.

"How can 551 people support a $3 million loan?" member Roy Reaves asked.

The commission determines the affordability of a loan based on median household income, said Mark Bennett, the Water Development Division manager. If the cost of debt service, operations and replacement is more than 1.5 percent of median household income, officials begin to question whether the loan is affordable.

Commission member Neal Anderson asked what percentage of projects were in financial compliance. Bennett said a survey of active projects conducted last year found more than 90 percent were compliant.

Commissioners also agreed to accept $489,250 made available for a loan and $31,702.57 in grant money sent to Perry County Levee District No. 1, which suffered multiple levee breaches during flooding just more than two years ago.

In an interview with the Arkansas Democrat-Gazette earlier this spring, the levee district's president, Jason Trantina, said the district had already completed the projects it intended to with $457,547.43 already received in a grant from the commission.

The district repaired its flood gate and raised the levee in several spots.

The commission accepted four more de-obligations of funding, totaling $101,524.96. All were because projects had been completed under budget.

Commissioners also approved a loan of up to $2,060,000 to the Sardis Water Association in Saline County to build a water treatment plant and wells to supply it. The commission has already determined an interest rate of 3.9 percent for the loan, which would be for up to 20 years.

A loan of up to $46,350 was approved for the Tulip-Princeton Water Association to replace water meters, and a grant of up to $309,000 was approved for Carthage to replace pumps, meters and other sewer infrastructure.

Metro on 05/20/2018

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