Council authorizes up to $17.25M in water and sewer revenue bonds; bond counsel says system can absorb debt

Centerton City Council adopted ordinance 2026-26 authorizing the offering of not-to-exceed $17,250,000 in Arkansas Water & Sewer revenue improvement bonds to finance system capacity projects. The council held a statutorily required public hearing, heard a presentation from bond counsel and staff, and adopted the ordinance and its emergency clause by roll call.

Bond counsel (speaker 23) summarized the system’s fiscal picture and argued that the system’s operating margins and debt service coverage can accommodate the proposed borrowing without an immediate rate increase; the illustrative borrowing cost discussed in the meeting ranged near mid-4% interest in the presentations. Staff said the proceeds would fund two sewer improvements and related work that allow the utility to serve new developments. Council and staff emphasized that the water and sewer system is an enterprise fund and that rate decisions remain separate and will be considered through standard financial analysis.

Why it matters: The bond authorization initiates a multi-step process—parameters adoption, marketing, sale and ratification—that will fund critical infrastructure to support growth and system reliability. While staff asserted no immediate rate increase is expected to pay debt service, future rate adjustments remain possible depending on broader rate studies and cost assumptions.

What’s next: Staff expects to return with final ratifying documents after marketing the bonds (target sale and closing milestones were discussed); the council adopted an emergency clause so staff can proceed with scheduling and sale steps.