City Council considers loan offer from USDA

The prospect of USDA grant and loan money for improvements was discussed by members of the Piggott City Council at a special meeting Monday. During the noon-hour gathering, aldermen agreed to resolutions allowing the city to apply for grants to help pay for a new police cruiser and fire truck, but tabled an effort to secure funding for sewer and water improvements.

On hand to discuss the matter was Ricky Carter from the Batesville regional office of the USDA, along with city engineer John Selig with CEA.

Carter told the council that in order to qualify for grant money to pay for improvements and repair to the sewer and water system, the city would be required to raise its rates.

"Based on an average of 4,000 gallons used per month, we would require rates to be near $30 a month for Piggott to qualify," Carter told those in attendance. "If you decide to just apply for loans, that would be much lower and I would expect about a $1.50 average increase across the board."

He went on to explain the amount was an average and that customers who use more water would see a bigger share of the increase while others may see very little change.

He also explained that any loans would be set up to be repaid over a 40 year period with an interest rate of 3.5 percent, which is below the current municipal lending rate. Carter also added that if a review of the city's water department finances indicates an ongoing annual surplus, the increase in rates could be lowered or possibly not required.

Aldermen, weighing the impact of the federal money against the higher rates, decided to scrap plans for pursuing a grant and instead seek input from the public on the loan offer. The measure is expected to be on the agenda for the next meeting, set for Monday, June 29.

"Currently our water rates are based on the Consumer Price Index (CPI) here in Piggott, and rates only go up if the CPI does," noted Mayor Gerald Morris. "We have worked hard to keep rates down." In turn the city's sewer rates are determined by the amount of water each customer uses.

Council members did approve measures to allow application for grants for the police car and fire truck. If approved by the USDA, the city would receive no more than $8,000 toward the purchase of a new police cruiser and no more than $62,500 toward the purchase of a fire truck.

Newly appointed fire chief Bradley Scheffler, who is also the city's water superintendent, noted the full purchase price of a new fire truck would run around $179,000 and the grant would pay for about 35 percent of the purchase if approved.

The funding through the USDA, which is part of the Federal Stimulus Act of 2009, provides $600 million nationwide and about three million dollars for the state of Arkansas. Carter added that although there is a great deal of grant money available, most of the help is coming in the form of low interest loans.