The 15th state loan to the Little Rock wastewater utility to upgrade its sewer system will be for $51.4 million.
The Arkansas Natural Resources Commission approved a staff recommendation Wednesday to loan the Little Rock Water Reclamation Authority another installment of the tens of millions of dollars already loaned to the utility.
The Little Rock Water Reclamation Authority is making the upgrades as a part of a settlement agreement reached with the Sierra Club over sewer overflows. The environmental group sued the utility in 2001, alleging Clean Water Act violations, namely in Fourche Creek.
In 2017, the utility celebrated a year without an environmental violation.
The utility will use the funds approved Wednesday to rehabilitate the current collection system, which may involve replacing some pipe, said Debbie Williams, the utility's chief financial officer.
The collection system improvements aim to minimize the amount of rainwater that gets in. Overflows happen when the collection system gets inundated with water, the utility's Chief Executive Officer Greg Ramon said.
Those improvements will put the utility on the path to compliance with a consent administrative order from the Arkansas Natural Resources Commission and the Sierra Club, which it has until Dec. 31, 2023 to reach, Ramon said.
The Little Rock Board of Directors in 2015 approved a rate increase for customers through 2021 to cover future loans. The utility has estimated about a $263 million total cost for infrastructure improvements.
The utility's rates for customers are set through 2021. Those costs cover all the improvement projects the utility has planned.
Glen Hooks, executive director of the Sierra Club in Arkansas, said he believed the improvements meant overflows were less likely today than they were in 2001.
"The Sierra Club is pleased that Little Rock continues to improve its sanitary sewer system, which can only mean good things for protecting our health," he said in a statement emailed to the Arkansas Democrat-Gazette.
Commission loans tend to have lower interest rates than other loans, and the agency gives out tens of millions of dollars each year in loans, mostly through federal funds covering water and wastewater projects that are disbursed to the state.
The terms of the loan have not been set, but the repayment schedule will not exceed 30 years, according to the staff recommendation.
Commissioners approved the loan with a voice vote with no dissent Wednesday.
The utility serves the city and has 69,410 customers.
Metro on 11/16/2018
CORRECTION: The $51.4 million loan approved Wednesday by the Arkansas Natural Resources Commission was to the Little Rock Water Reclamation Authority, a wastewater utility, for sewer system upgrades. A headline on an earlier version of this story misidentified the type of utility.