About 460 acres near Lake Maumelle soon will belong to Central Arkansas Water for about $3.5 million after the utility's board of commissioners approved the purchase Thursday.
The board also approved authorizing a bond to secure a $2.2 million engineering contract for planning and design of improvements at the Ozark water-treatment plant. The board further discussed the utility's energy costs and various infrastructure investments that could ultimately save the utility money, although no votes were taken for approval of construction projects.
The utility has a practice of securing land in the watershed to protect the lake, when possible, from potential development. The lake is the utility's main water supply.
The property being purchased is north of the lake and is accessible by multiple roads.
"It is a property that could be developed relatively easily," Central Arkansas Water CEO Tad Bohannon told commissioners.
The price per acre works out to about $7,536.72, which Bohannon said was less than the average cost of past land purchases and less than half of what the seller -- The Woodcrest Co. LLLP -- originally asked.
The utility will pay for the land in several installments, eventually using a bond in 2023, when the utility expects the have to take a loss of $192,779 on the final year of the purchase.
Commission members asked about the financing of the project but did not voice opposition.
Member Jim McKenzie supported the proposal.
"If you wait until development demand is upon you, the price will be significantly higher," he said.
The board approved the purchase with no opposition. Members Eddie Powell and Anthony Kendall were absent.
The board also approved a $2.2 million contract with Carollo Engineers to plan and design improvements to the Ozark water plant, including the installation of solar panels for better energy efficiency. Commissioners must approve at a later date a construction contract to do the work Carollo Engineers designs.
The improvements are part of the utility's facility plan, adopted by the board in January, said Jeff Mascagni, the utility's chief financial officer.
The contract with Carollo Engineers will be financed through a revenue bond not to exceed $2.5 million.
Commissioners approved issuing that bond with no opposition.
The board also heard about the progress of an energy audit of the utility aimed at finding ways the utility could change its operations and facilities to save money.
Bohannon said the earliest the board could vote on anything related to the audit's findings would be July because the audit is not yet complete. More precise projections of cost savings of specific measures have yet to be determined, he said.
Sterling Miller of Performance Services presented the auditors' findings so far, which show the utility spends between $2.6 million and $3 million annually on energy. Most of those costs are from the water-pumping process and at plants, rather than energy use at other buildings.
The auditor believes the utility could install more than a dozen megawatts of electricity at a handful of sites in its service area and save hundreds of thousands of dollars annually.
Solar installation has increased across the world in recent years, with the price of panels dropping and a larger number of companies offering to sell and install the systems. Many companies and homeowners in Arkansas have installed them in hopes of phasing out electricity costs.
The industry expects continued growth, even with a four-year tariff on imported solar panels instituted earlier this year by President Donald Trump's administration.
The auditor also has suggested the utility could save money by changing operations and fee structures.
Metro on 05/11/2018