The Hot Springs Board of Directors authorized a $46.25 million bond issue last week to address sewer system overflows that have released more than 5 million gallons of wastewater into the Lake Catherine watershed since the start of the year.
The debt is on top of the $90 million ratepayers are already financing for improvements made to the Fairwood and Stokes Creek basins of a collection system serving almost 27,000 wastewater connections through 680 linear miles of gravity and pressurized mains. The more than $130 million intends to get the city out from under state directives mandating compliance with the Clean Water Act.
But there's more work to do after the city closes consent administrative orders it's been bound by since 2008.
"This is always an ongoing process," Craig Johnson, vice president of Crist Engineers, the city's utilities consultant, told the board Tuesday. "If you have infrastructure in the ground, at some point in time it's going to break, and it has to be rehabilitated. It may have to be replaced. It's an ongoing process from now until the end of time."
The wastewater master plan Crist presented Tuesday outlined an additional $97 million of improvements recommended through 2040. The board will consider a resolution adopting the long-range plan at its July 5 business meeting.
The $97 million comprises more than 100 projects, including 22 in the near term that aren't related to the city's CAOs with the state Division of Environment Quality. Johnson said no funding sources have been identified for the estimated $34 million in near-term improvements or $63 million in mid-and-long-term improvements.
The new rate schedule the board adopted in November will secure principal and interest on the $46.25 million debt issue authorized last week, raising the monthly debt service charge for residential customers inside the city from $17.73 to $24.48 by 2024. Residential customers outside the city will see their charge increase to $34.05 by 2024.
The board asked if impact fees could be adjusted to help service debt the city expects to issue over the next 20 years. The one-time fee supports a fund that helps wastewater capacity keep up with demand for service.
Per the ordinance authorizing the fee, the money can't be used for operations or maintenance or for the construction of facilities that don't increase system capacity. The fee is tied to the size of a customer's water meter. A $500 fee is assessed for the installation of a five-eighths inch meter, rising to $14,500 for an 8-inch meter.
The city's utility rate consultant has told the board the impact-fee formula can justify a more than $5,000 fee for a five-eighths inch meter and more than $400,000 for an 8-inch meter. Higher fees encourage developers to size meter requests appropriately, he said, and reduce strain on capacity.
City Manager Bill Burrough told the board a master plan has to be adopted before impact fees can be adjusted.