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Staff Looks Into Funds for Sewer

Staff Looks Into Funds For Sewer      

By Carole Medlock       Fort Smith Times Record 

Controversy over whether it is legal to provide sewer service to an area without charging for the construction of the sewer line may keep Greenwood from providing the service.

Greenwood Mayor Garry Campbell said he is not sure how the city will proceed with a plan to extend city sewer to Bell Addition, a housing addition now served exclusively by individual septic systems.

Officials with the Arkansas Department of Health have voiced concern about the septic systems and their ability to provide adequate wastewater disposal.

But those same officials say there have been no official complaints to prompt an investigation of the area.

Historically, the city has required individuals or developers to bear the expense of extending the city’s sewer system to a proposed area.

Campbell said one residential area, Park Heights, formed a sewer improvement district and constructed their sewer extension with long-term low-interest loans.

The decision to do that was based on the understanding it was illegal for the city to use public money to improve private land.

The Bell Addition project was planned for 2004, but funds have not been made available.

The city’s plan is to finance a collector line to the addition, only recovering the cost for residents to tie onto the line, not for the construction of the line itself.

Campbell said city staff is in the process of analyzing sewer funds to determine whether they are available for such construction or restricted for other purposes.

There is about $170,000 in the sewer operating and maintenance fund, $94,000 in a special sewer fund and about $550,000 in three CDs, Campbell said.

Some of that money is restricted to pay for bonded indebtedness for capital improvements made three years ago, he said.

It has been estimated the Bell Addition project planned for this year would cost about $200,000, according to the city’s budget information.

Although Campbell has not met with residents from the addition recently, he said it is his understanding that property owners are willing to pay to tie on to the system, but not necessarily to construct the main collector      line.

Campbell said two opinions from the Arkansas Attorney General’s office have not provided clarity needed by city officials on whether the city can finance construction of the project.

City Attorney Mike Hamby also eluded to the confusion surrounding the issue in a letter to Alderman Jim Newcomb and former Greenwood Mayor Judy Selkirk.

The letter states, “I have reviewed the attached two Attorney General’s opinions, and believe the issue is still probably as clear as mud.”

Both opinions were requested by Rep. John Paul Verkamp, R-Charleston, and both ask about the city’s ability to pay for sewer lines without reimbursement by the residents who will benefit from the service.

A question prompting the first opinion asks, “Does the City of Greenwood have authority to extend sewer trunk lines to areas of the City that do not have city sewer services, or would this be considered an illegal exaction      if the citizens to receive this new service do not pay their proportionate share of the cost of the line?”

The answer states, “No principle of constitutional or statutory law dictates that landowners be charged their proportional shares of the cost of constructing sewer trunk lines that service their property. A city might      finance a sewer trunk line extension by using either available general revenues or bond proceeds.”

A second request for an opinion asks if the previous opinion contradicts a state statute (ACA 12-235-305) that states, “No person shall be allowed to tap any sewer with out paying in proportion to the value of his property      to be benefited by it, as compared with the value of the property taxed in the district and the actual cost of the sewer.”

In its response, the attorney general’s office wrote, “You question my conclusion in (the previous opinion) that a city cannot finance the initial construction of a sewer extension by requiring all property owners along      its path to contribute proportionately to the cost of the extension. I continue to believe that a city cannot impose such charges as a means of financing initial capital construction.”

It continues, “I do not believe any property owner who is compelled to tap in to the system for reasons of public health may be charged a proportional share of constructing all or part of the system. With respect to a property owner voluntarily tapping into the system (the statute) provides that the new user shall be charged in proportion to the value of his property to be benefited by it, as compared with the value of the property taxed in the district and the actual cost of the sewer.”

City officials say questions remain about whether the city can “compel” residents of Bell Addition to tie onto the sewer because of the conditions of their present systems.

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