GRAVETTE A conference call to the Gravette City Council Monday evening explained the procedures for issuing bonds to pay for the city’s waste-water treatment project.
Ryan Bowman, spokesperson for Friday, Eldridge and Clark, Little Rock bond firm, spoke by phone to council members at the special meeting at City Hall at 5 p.m.
The meeting resulted in no action since it was merely informative for procedures in the issuance of bonds to pay for the multimillion dollar project.
The final plan will hinge on whether the Council proposes a special sales tax election or chooses to pay for the project through increases in customer charges.
The city is already obligated for $149,000 annually to retire a 2004 bond issue which refinanced a water/sewer project in 1999, and an $80,000 annual payment for bonds which financed the new water tower project which was completed last year.
The Council was presented additional projected sewer rates for payment of the debt which provided several alternatives; one with no sales tax, the other with a voter approved sales tax. How the sales tax issue is structured would determine how sewer rates would be set.
With no sales tax the average minimum monthly sewer bill for 1,000 gallons would be $35.92. For 4,000 gallons the bill would total $65.66. Involved is a $9.91 charge per thousand gallons used.
Pro-rating a one-cent sales tax through a complex debt/O.M. structure would see monthly bills drop appreciably, ranging from a possible minimum bill for 1,000 gallons of $14.06 up to $41.92 for 4,000 gallons.
There are variables involved in the complicated formula which the council must consider if a sales tax is approved. Such a tax would require an election which could possibly be held in February.
The Council was also provided a list of sales tax rates for Arkansas cities, 10 of which are already at the 3% level. These include Farmington in Washington County.
Mountainburg and BethelHeights in northwest Arkansas have 2.5% tax rates and Prairie Grove and Eureka Springs 2.25%.
Gravette’s sales tax is currently set at 2%.
If a proposed sales tax is defeated by voters the Council will have no option except to raise customer rates to finance the project.
News, Pages 15 on 10/20/2010
Print Headline: Procedures for issuing wastewater bonds explained to Gravette Council