HOT SPRINGS — Two manholes near Gulpha Creek released 5,306,375 gallons of unpermitted discharges from January through May, the state said.
The overflows went into the creek that traverses the northeast spine of the city’s wastewater collection system. One of two consent administrative orders the city entered into with the Division of Environmental Quality in January established a procedure to notify the public when overflows cause unsafe conditions in the creek and Spencer Bay, the Lake Catherine inlet into which the creek empties.
A former DEQ employee who lives in the affected area said the city failed to follow the protocol after it reported elevated bacteria levels last month. The CAO for the basin requires the city to issue a no-swimming advisory through its mass notification system when overflows reach the creek.
Water quality assessments the city submitted showed many of the overflows contained E.coli concentrations in excess of the public health standard of 126 colony forming units per 100 milliliters.
“We have remained in compliance with our consent administrative orders, however, we did not issue a Code Red call on every occasion,” City Manager Bill Burrough said earlier this week. “We have taken corrective action to ensure that happens, as well as informed our contact at ADEQ.”
According to the CAO, the city reported 140 overflows in the Gulpha Basin over a 40-month period ending last June. As part of its agreement with the state, the city consented to a $12,800 civil penalty for violating the Clean Water Act.
Burrough is hopeful the $46.25 million of ratepayer-financed debt the Hot Springs Board of Directors authorized Tuesday night will stop the chronic overflows. It will address the almost 4-mile-long gravity main that carries flow to the Catherine Heights Road pump station.
Groundwater infiltrates the large-diameter line during periods of prolonged, heavy rain, overwhelming the line and pump station. The board awarded RJN Group Inc. a $1,352,900 contract in March to engineer and design improvements to the line.
Debt issued earlier this week will also upgrade the pump station and build a 3-mile long force main that will carry flow from the station to the treatment plant on Davidson Drive.
“I am hopeful that with the change of season, we will not have the amount of rain that we have experienced in the past two months,” Burrough said. “We remain vigilant in our efforts to correct the overflows, and the bond issuance will further our commitment to this success.”
According to the debt service schedule, the bonds will increase the debt obligation on wastewater customers to almost $200 million, the amount of principal and interest ratepayers will amortize over 30 years. Most of the debt paid for improvements to the Fairwood and Stokes Creek basins and upgrades at the treatment plant.
Hundreds of overflows the city reported from 2004 to 2008 led to the CAO that was amended in January. The city paid a $105,000 fine under the original agreement.
“About 12 years ago we entered into a CAO to repair our aging wastewater infrastructure,” Burrough told the board. “We had chronic overflows in about 18 manholes. We spent about $90 million repairing Fairwood and Stokes Creek basins. We have some work to continue, and that’s what this bond issuance is about.”
The new CAO requires the city to complete its work in the Gulpha Basin by 2030.
Debt the board authorized Tuesday night was issued in three bond series. The city said two series generating $10.11 million and $8.84 million for wastewater improvements were sold to Truist Financial in North Carolina, providing bondholders semiannual interest payments of 4.32% and 3.62%.
Raymond James and Stephens Inc. sold the third in a public offering, raising $27.3 million for wastewater projects. The bonds were marketed at 4.596% interest. More than $30 million was planned for the public offering, but the city moved more than $2 million to the private placement with Truist. Reducing the public offering will save ratepayers $695,000 in debt service costs, the city said.
The entire $46.25 million included $509,500, excluding the insurance premium and surety bond, in issuing costs, the city said. Increases to ratepayers’ monthly debt service charge the board adopted in November will secure the debt.
The rate structure that took effect in January raised the monthly debt service charge for residential customers inside the city from $17.73 to $19.73. The rate will increase to $24.48 in January 2024, with 3% annual increases assessed in subsequent years.
The debt service charge for residents outside the city, the location for most of the more than 35,000 water meters the city serves, increased to $27.39 in January. It will rise to $34.05 in January 2024, with annual 3% increases assessed in subsequent years.
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