City officials say a scarcity of water, and the city's water extension policy, led them to deny a request from Wal-Mart last week to extend water services to a proposed Supercenter and a Neighborhood Market in the county.
City Manager David Watkins said he and other city leaders first met with agents representing Wal-Mart a few months ago regarding a property on Pittman Road near Highway 70 west as the site for a Supercenter and in the Highway 7 south area near Amity Road for a Neighborhood Market.
"These were not people from Bentonville coming here to negotiate a deal. That is not the case at all," Watkins said.
"When we met, the No. 1 purpose of the meeting was to give an early read on what the (city) staff's recommendation would be because the board has delegated those decisions to my staff if its commercial (development) or more than 20 residences. What came into play is that the board's policy, which they have asked me to implement, is that we are giving preference to people inside the city as opposed to outside," he said.
The reason for that policy, Watkins said, is that "we know we have a scarce amount of capacity. People keep forgetting that and we have to remind them."
"You can't grow your business on all fronts when you're exceeding the state recommended 80 percent of production capacity -- not this year because we've been wet -- but utilities have to plan for 50 years out. If you go back to 2012, we exceeded 80 percent of capacity by about 50 percent. That's unacceptable," he said.
Deputy City Manager Bill Burrough said more than 80 percent of capacity was reached 55 times in 2012, but 2013 and 2014, so far, were wet summers, which held consumption down.
"But as we look at that, and our obligations, we're not at a crisis point with the water and we're trying to prevent ourselves from being there," he said.
Burrough said he doesn't know how long it will be before an additional water supply is available from any source, but the city has already approved service to 1,200 lots inside and outside the city, which have not been built upon yet, and an agreement with the Royal Water District for a large land mass the city is obligated to serve with they come online.
"We have to parcel out what we do have available before a new treatment plant comes online, which optimistically will be early 2018. We have to be very selective in what we approve, and right now, approving a water main upgrade, which is what it would take for a Wal-Mart store on Pittman Road, is not a priority," Watkins said.
Watkins said he told the agents that he could not imagine the city board approving the Pittman Road site, especially since that would also impact the Albert Pike Road Wal-Mart store.
"Wal-Mart doesn't have to worry about that, but with the city of Hot Springs being totally dependent on sales tax for its revenue, it's a big deal. Using city assets to promote a tax base outside the city -- and could take away from the tax base of the city -- is not a good investment for the people of Hot Springs," he said.
"I totally discouraged that one and the people who were there would tell you it was very black and white about the Wal-Mart store on Pittman Road," Watkins said.
At the time of the initial meeting, Watkins said he felt like the Amity Road site was an area relatively close to areas that should be in the city limits, but told the representatives they would need to check with the city engineer's office before taking any action to see if there was water available to meet the demands of that size development.
"They went to the engineering department and found that the development would require an upgrade not only in water, but sewer. A letter was sent to them a couple of weeks ago by City Engineer Gary Carnahan that we could not support that location," Watkins said.
Watkins said consideration also has to be given to not just the major store that might be developed in an area but the accompanying development that occurs around it.
He also said that the city water utility is owned by the city, not the customers, and there is no mandatory obligation to provide service outside the city limits.
"Our fiduciary responsibility is to the shareholders of Hot Springs, so there is a concern that the water utility is making an investment that will take our tax base and move it somewhere else to the detriment of the people who built it," he said.
Bob Benscoter, vice president, Crye-Leike Realtors, said Tuesday that the Wal-Mart agents said they would still like to do the projects here but without cooperation from city officials, there is nothing they can do, and would now require "something in writing" before continuing with their plans.
"Wal-Mart is the largest corporation in the world and they don't make foolish decisions, but without water and sewer, they can't do anything," Benscoter said.
He said Wal-Mart is "a great organization with great stores, promotes family values that wants to do two quality projects and provide jobs and amenities for everyone in Garland County and the city to enjoy."
Benscoter said the proposed stores would not only draw customers from the immediate areas, but from surrounding areas, which would bring more people into Garland County and the city.
"It appears the city's main thrust is not on supplying top-notch services, but on how to acquire additional revenue, and I think their thoughts are misguided. I think if they provide quality services, then they'll have people who want to be involved and inside the city limits. Until that happens, I think you won't see a turnaround of public sentiment on that," he said.
Benscoter said he feels that to have an entity like Wal-Mart want to come in and expand, be told they can have water and sewer and then told no, "leaves a bad taste in their mouth about Hot Springs and I don't think that's the way business should be conducted by the city -- to discourage expansion, employment, tax base, the whole nine yards."
According to Benscoter, information provided by Garland County Judge Rick Davis shows the monthly water usage by a Walmart Supercenter is about equal to that of 17 single-family homes. He also said the Albert Pike Road Walmart Supercenter paid $70,345.27 in property taxes to the county and the Central Avenue store paid $136,061.20.
"People talk like we're keeping something from happening in the next month or two and that's ridiculous," Watkins said.
"I feel very upfront about what we've told them, but we have to look out for what's best for the customers and the city. In terms of our customers, about half of them don't live in Hot Springs, and our charge right now is to make sure they have an adequate water supply. If we expand out way beyond the city's growth area, that is hurting them and the people inside the city," he said.
Local on 07/30/2014