Tuesday, July 13, 2010

TOP STORY > >Group told financing is likely for water line

Leader staff writer

The leaders of the Lonoke-White Public Water Authority who met in Ward at noon Tuesday appeared optimistic but cautious about the latest financing plan for the 16-year-old project to bring water to the central part of the state from Greers Ferry Lake.

Several plans have fallen through for the group that includes Cabot, Jacksonville, Ward, Austin, Beebe, Lonoke, Furlow, McRae, Vilonia, North Pulaski Water Association and Grand Prairie Bayou Two Water Association.

Last year, plans to use federal stimulus money from the Environmental Protection Agency funneled through the Arkansas Natural Resources Commission failed because members of the project have no immediate need for water. A revised version of that plan that would also use state money failed for the same reason.

The latest plan is to pay for 65 percent of the project with money from the USDA at 4 percent interest with 35 percent of that interest given back as a rebate through the Build America bond program which is also stimulus money. The remaining 35 percent of the funding would come from selling bonds.

There is no rush on the private bond part of the latest plan, but to get the interest rebate, the details must be worked out and approved by Dec. 31. Although there is talk of extending the deadline, Bob Wright with the bond firm Crews and Associates, told the group that there is no talk of leaving the rebate at 35 percent.

But saving money on financing is not the only reason for moving quickly, Wright said. The price of construction is also low now.
Calvin Aldridge, a certified public accountant from Cabot who has been brought in to help with financing, told the group they must work fast.

“Time is short,” Aldridge said. “You definitely want to get a plan in place within the next month. If you’re going to use (the Build America program), you’re going to have to use it fast.”

Woody Bryant, project manager, told the group that the cost for each member will likely go up under the latest plan.

“It’s not going to be quite as cheap as we thought it would be but we think it will still work,” Bryant said.

Since the USDA can’t fund projects for cities with populations greater than 6,500, Cabot’s and Jacksonville’s 35 percent of the project would be funded with bonds, Wright told the group.

Bill Cypert, spokesman for the Cabot Water and Wastewater Commission as well as a candidate for Cabot mayor, questioned whether Cabot and Jacksonville would be expected to repay 35 percent of the cost of the project.

Cabot and Jacksonville are currently paying for connections to Central Arkansas Water out of the Little Rock area and both say they need the connection to Greers Ferry Lake for emergency use.
Bryant assured Cypert that Jacksonville and Cabot would not have to pay more than they have already agreed to pay.

Cypert also questioned Crews and Associates involvement in the project without the standard requests for qualifications that cities must use before hiring professionals.

Clint McGue, attorney for the LWPWA, responded that the restrictions for LWPWA are not as tight as for cities.

Project engineer Tommy Bond of Jacksonville said in his monthly report that a funding meeting last week was attended by Ricky Carter and Larry Duncan from the USDA, Dave Fenter from ANRC, bond counsel David Menz and Wright from Crews and Associates.

During that same meeting, Crist Engineering submitted a draft of the environmental report that will have to be approved before the project may start. Bond said the USDA is so committed to the project that Martin, from the USDA, will hand carry the environmental report to Washington when it is completed.