Commissioners of Central Arkansas Water voted last week to sell $18.5 million of utility revenue bonds in two issues to finance new water transmission lines and to acquire land that will protect its long-term supply.
Utility chief executive officer Graham Rich said the two bond offerings are scheduled to be issued in the summer. The bonds probably will require a rate hike, he said, but the amount of the increase won’t be determined until next year.
The utility serves some 400,000 residents in several Pulaski County cities, including Little Rock, North Little Rock, Cabot, and Jacksonville.
The water system’s existing revenue debt is rated Aa3 by Moody’s Investors Service.
The proceeds of the bond issuance will provide $8.1 million toward the $12.4 million price tag for a 915-acre tract in a critical area of the Lake Maumelle watershed, the main water source for Central Arkansas Water.
The state provided $4 million in 2009, and the utility said it expects to receive another $1 million from the Arkansas Game and Fish Commission for the effort.
The bonds financing the land purchase will be supported by a monthly watershed fee of 45 cents that was applied to customer bills last year.
A separate bond issue will provide $10.4 million for construction of two large transmission lines.
