Alderman hopes tax extension isn’t needed to pay for sewer project
Posted on Thursday, May 25, 2006
URL: http://www.nwanews.com/nwat/News/41033/
Asking Fayetteville voters to extend the sewer tax might still be the best alternative to increasing monthly rates to pay for the cost overruns of the Wastewater System Improvement Project. "I hate to do that," said Ward 2 Alderman Kyle Cook, chairman of the Sewer Committee. "We’ve already gone to the people once asking for the tax and an increase in rates, now we’re asking for a little more tax."
Cook said he is still trying to find any available money to help cover the cost of the sewer project, which has jumped to $183 million.
In 2001, voters were asked to levy a 3/4-cent sales tax or face a 134 percent monthly rate increase to repay up to $125 million in bonds for the project, which includes a new plant, improvements to the Paul R. Noland Wastewater Treatment plant as well as sewer transmission line work. Though the tax prevented the 134 percent increase, the council implemented a 29.5 percent increase to cover operations of the new plant.
With the project now three years overdue and nearly $60 million over budget, city leaders must decide how to cover the excess cost. The remaining need comes in at around $47 million after impact fee revenue, revenue from the 2003 rate increase and the sale of part of the sewer plant site are applied.
The city has looked at financing the remaining debt with sewer rates and has discussed a 68 percent increase, which would take the monthly rate from $3.02 to $5.02 per 1,000 gallons. City staff is looking to get the potential rate increase down to 49 percent, but the Sewer Committee doesn’t want to see any rate increase.
Cook said that while he plans on discussing budgetary priorities, it may come down to asking for the extension. Staff is supposed to have estimates of what bills would look like with the rate increase at the next committee meeting, he said, but residents are already dealing with a wide array of cost-ofliving increases. "I don’t like it any more than anybody else does, but we’re in the middle of this project," he said. "If we want to get it done in May of ’ 08, there’s the [issue of] timing of this money — we’ve got to get it figured out fairly quick."
One possible avenue for additional revenue for the project could come from an agreement with the Arkansas Natural Resources Commission, which is considering incorporating about 50 acres of the westside sewer plant site into a wetlands bank.
Dave Jurgens, water and sewer director, stressed that the bank is still very preliminary and there is no official offer, but an agreement could include a cost avoidance and revenue.
The bank would include other properties that would be developed as native wetlands, Jurgens said. The commission would then sell credits to developers whose projects would disturb wetland in other areas, he said.
Jurgens said the latest proposal he has seen included a trail system, which could be connected to the city’s at a future date. Because the commission is talking about giving the property back to the city after all credits are sold, it may be unlikely that they would want to compensate the city any more than by building and maintaining the wetlands required for the plant project, which could save about $270,000.
Ken Brazil, an engineer with the commission, approached the Farmington School Board a month ago about the possible purchase of some of its property for the bank. He told them the commission would not be able to pay more than appraised value for its 32 acres, which would be part of a 250-acre wetland bank.
Brazil was unavailable for comment Wednesday.