Board clarifies franchise-fee language for large water and sewer users
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Summary
Directors advanced ordinances to confirm a 10% utility franchise fee and to preserve contractual waivers for very large water and sewer users; city attorney said prior MOUs referred to a potential development that never occurred and language includes usage triggers (750,000 gpd sewage; ~1,000,000 gpd water).
The Little Rock Board of Directors advanced two ordinances amending franchise-fee language for Central Arkansas Water and the Little Rock Water Reclamation Authority and confirmed that the city retains the authority to negotiate alternative agreements with very large water and sewer users.
Mr. Carpenter, the city attorney, told the board the ordinances were intended to clarify that the 10% franchise-fee figure has been the operative rate (since increases adopted in 2007) and that certain large users may be excluded from revenue calculations if the city negotiates an alternative contractual arrangement. He said the April 2025 MOU mentioned in earlier materials related to a proposed development (Willow Bend Capital LLC) that never proceeded and that no current business has met the usage triggers set in the ordinances.
Mr. Carpenter described the usage thresholds that would permit negotiated fee arrangements: an installed and billed meter discharging more than 750,000 gallons per day on an annual average for sewer users, and a threshold of about 1,000,000 gallons per day for water (noted in the ordinances as "1 MGD"). He stressed the ordinances are written to apply by usage level (a very large user), not to one named company, and that the language allows the city to accept alternative consideration in lieu of standard franchise-fee revenues.
Director Wyatt and other board members pressed for clarity on whether the new ordinance text reproduced limits in prior resolutions and whether active MOUs would be affected; staff and the city attorney said no active contract has invoked the waiver language and advised the board staff would ensure ordinance cross-references and section numbering are corrected before final adoption.
Next steps: the ordinances were advanced in the grouped-items vote; staff will correct synopsis and section references as requested by directors before final readings.
