FORT SMITH : Directors OK bonds for water projects
Posted on Wednesday, July 2, 2008
FORT SMITH — City directors voted Tuesday to issue $ 117. 42 million in revenue bonds to pay for improvements to the city’s water and sewer system and refinance an existing bond issue.
Of the total amount of the bond issue, $ 45 million will be devoted to paying for the rehabilitation and expansion of the Mountainburg water treatment plant at Lake Fort Smith, extending sewer service into the city’s southern growth area, building a new water storage tank on the city’s south edge and replacing crumbling residential water lines in the city.
The rest of the money will go toward refinancing a 2002 bond issue. The refinancing will extend the retirement of the bonds for another eight years, to 2032.
The longer term will lower annual payments on the bonds and provide more money for various water system improvements without forcing the city to raise water rates, acting city administrator Ray Gosack said Tuesday.
Fort Smith officials have been planning to upgrade the Mountainburg water treatment plant as part of the Lake Fort Smith expansion project. The renovation will include adding treatment capacity to the plant to cover the city’s growing demand for water and make repairs to the aging plant.
City directors approved a bond issue in October that, among other things, provided $ 8 million for the plant reha- bilitation work. The bond issue city directors passed Tuesday will pump $ 37 million more into that project.
Extending the sewer lines and building the water storage tank on Howard Hill on the south edge of the city are being made in anticipation that the city will continue growing in that direction. Fort Smith officials acquired the rights to extend water and sewer services into that area from the James Fork Regional Water District, which provides water service to south Sebastian County residents and others.
The bond money used for those water and sewer improvements will be paid for with revenue from rates charged to customers. Water rate increases are being phased in to raise money to retire the bonds. The first of three rate hikes was Oct. 1 when the rate for the average residential water customer rose to $ 2. 64 for every 100 cubic feet of water. By 2010, the rate will increase to $ 2. 82 per hundred cubic feet.
One hundred cubic feet of water equals 748 gallons.
As with the water rates, the first of three sewer rate hikes went into effect Oct. 1 and brought the sewer rates charged to Fort Smith customers to $ 2. 75 for each 100 cubic feet of water used. By Jan. 1, 2010, the rate will be $ 3. 05 for each 100 cubic feet.
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