Leader Blues

Tuesday, April 06, 2010

TOP STORY >> Water plan will rely on state funds

By JOAN McCOY
Leader staff writer

The reports during the regular monthly board meeting Tuesday of the Lonoke-White Public Water Authority were mostly about more delays in getting started on the project to bring water to the area from Greers Ferry Lake.

The bad news is that even though members are getting approval from their city councils or other governing bodies to sign water-purchase contracts with LWPWA, the application for funding still doesn’t meet the “immediate need” requirement for federal money.

But the good news is that the Environmental Protection Agency, which last year said the project wasn’t eligible because there is no immediate need for water, now says that since stimulus money won’t pay for it, the project will be turned over to the Arkansas Natural Resources Commission.

ANRC, which has wanted to fund the water project for almost a decade, is the conduit for much of the federal loan money that pays for water and sewer projects in Arkansas.

The fact that the same rules apply for funding with EPA money, whether it is stimulus money or the regular allocation of funds, apparently will no longer be an impediment with the EPA out of the picture. At least that is what the members said they hope is the case.

Woody Bryant, project manager, said during the board meeting that he believed the EPA was tired of the heat put on them by the congressmen and senators who represent the members of the project.

Although some of the 11 members of the LWPWA need water now, most have found alternative supplies since the Lonoke-White Water Project started about 15 years ago. Most keep their systems in good repair. Both of those conditions are working against their efforts for funding through ANRC.

If the members’ systems were worn out and they needed water now, funding wouldn’t be a problem, Bryant said.

Ward Mayor Art Brooke, chairman of the board of LWPWA, said it seemed to him that part of the project’s problem with EPA is that it is so unique. No one has seen anything like it before, 11 distinct entities all working together on one project.

The members are Jacksonville, Vilonia, Cabot, Beebe, Lonoke, Ward, Austin, Grand Prairie, Bayou Two Water Association, North Pulaski Water Association, Furlow and McRae.

Last summer, funding for the project seemed a sure thing. A $15 million stimulus grant and a $30 million loan at 3.5 percent interest were supposed to pay for it. It was “shovel ready” which was essential for stimulus funding.

The Lonoke-White Project had been bid about five years earlier, but it was halted when those who would use the water refused to sign contracts because the cost of the water was higher than they had been told it would be.

Since that time, a lawsuit has taken control of the project away from Community Water Systems in the Heber Springs area and given it to the cities and water associations in central Arkansas that will actually use the water.

The project hit a snag in August 2009 when the EPA informed ANRC that it was ineligible because it would provide water to meet future needs, not immediate water needs.

The federal money was to come through the Drinking Water State Revolving Fund, but the ANRC officials who were working on the funding were apparently unaware of the restriction. They said officials with EPA were under scrutiny to ensure the stimulus money was not misspent.

When the EPA did not concede that the Lonoke Project was eligible for the stimulus money; ANRC found another $50 million at 1 percent interest to pay for the project.

But the federal guidelines still applied and the project leaders, including Bryant and the engineers, have carefully worded all correspondence relating to funding to make the project appear eligible.

In the meantime, participants in the projects are moving forward as if funding is guaranteed. Bryant reported that all but Cabot, Lonoke and McRae have agreed to sign the water-purchase contracts when they are ready.

Clint McGue, attorney for the project, said that he thought all the funding problems would have been settled by now. Now, he hopes those problems will be resolved and the contracts ready for signatures by June.