Share This Article
The Mountain Home City Council on Thursday approved $20 million in water and sewer revenue bonds to fund what city officials have called a critical upgrade to the aging distribution system, and separately authorized an engineering contract that moves the long-awaited Lake Norfork water intake project past the starting line.
Both votes were unanimous across all three readings.
Southwest tank to Midway tank
Public Works Director Steve Hill told the council the bond-funded project will address a vulnerability in the city’s water system that dates to 1969, when the 201 pump station was built. That station is the only one serving the 1080 pressure zone, meaning a single equipment failure could cut water service to homes and businesses across a wide swath of the city.
“This is not just a project to expand,” Hill said. “It’s really a project that gives us expansion, but more importantly provides us some protection against major failure in the distribution network.”
The project was rated critical in the city’s 2024 master plan, and a preliminary engineering report was delivered in November 2025. Under the plan, a new pump station will be built at the current Southwest tank location, and approximately 23,000 feet of 16-inch water main will be installed connecting the Southwest tank to the Midway tank. Additional piping will loop into other areas of the system to create redundancy.
Hill estimated about nine months to a year of design work, including survey and easement acquisition, with construction beginning sometime in 2027.
“It’s been a long time coming,” Hill said.
Bond structure
Paul Phillips, senior managing director at Crews and Associates, outlined the bond structure for the council. Phillips, who has worked with the city on bond issues for more than 20 years, said the bonds will carry a 20-year final maturity and a AA credit rating backed by a bond insurance policy, the same approach that worked well on the city’s previous $10 million bond issue.
“We tried something a little bit different,” Phillips said of the prior issue. “The insurance premium more than offset the cost of it. In other words, our debt service is greatly reduced by having it available.”
Phillips said the larger issue should attract strong demand from banks, individual investors and larger institutional buyers, including insurance companies. He told the council that if the bonds were sold at current rates, the interest rate would come in around the low fours, better than the mid-fours the city secured on its previous issue.
The plan is to sell the bonds around mid-March and close by March 31, though Phillips said the timeline depends on the audit report and could require some flexibility.
Council member Jennifer Baker asked Phillips to explain what a bond is for the benefit of residents.
“In some simple form, it’s a loan,” Phillips said. “The city is going to use that loan to make utility improvements, and in return, the city’s going to pledge water and sewer revenue.”
The bonds will be secured by water and sewer revenue, not property taxes.
Lake Norfork water intake
In a separate vote, the council authorized a contract with Garver Engineering for preliminary design and engineering services on the Lake Norfork water intake, transmission main and water treatment plant project.
Hill told the council the project has been in the works since 2014. The city released a request for qualifications on Oct. 15, 2025, and received two responses by the Nov. 14 deadline. A selection committee unanimously chose Garver as the most qualified firm.
The preliminary phase will include geotechnical investigations at the new intake site, along the transmission main corridor and at the water treatment facility. It will also cover survey and easement work needed to meet Arkansas Department of Health requirements and the development of design information memorandums that will carry the project to roughly 15 percent design.
The council approved the contract unanimously.
Rezoning on Kenway Street
The council also approved a rezoning request for a property at 706 Kenway St. from Residential R-1, which allows only single-family dwellings, to Residential R-1A, which permits two-family dwellings.
Attorney Ted Sanders presented the request on behalf of the property owner, telling the council the lot is large and deep enough to accommodate a second dwelling unit. The property currently has an old, deteriorating building behind the main house that the owner plans to tear down and replace with a new rental unit.
Sanders said adjacent property owners had signed off on the change.
“When my client came to see me, I said, I don’t think that’s happening unless the neighbors agree,” Sanders said. “Lo and behold, he got the neighbors that adjoin this property.”
The Mountain Home Planning Commission had already held a public hearing and recommended approval. The council suspended its rules and passed the ordinance through all three readings in a single meeting, with the emergency clause allowing the owner to begin demolishing the old structure within the required 30-day window.
After the vote, City Clerk Scott Liles asked the property owner whether the new unit would be a long-term rental or a short-term rental like an Airbnb, advising them to make sure the proper permits were in place if they planned to do short-term rentals. The owner said it would be a permanent rental.
Zoning regulations postponed
The council had originally been expected to begin considering a proposed overhaul of the city’s zoning regulations at Thursday’s meeting, but the item was pulled from the agenda after Building Inspector Clay Strain was unable to attend. City Clerk Liles notified council members and the public ahead of the meeting that the zoning discussion has been moved to the March 5 meeting and will likely require readings on March 5, March 19 and April 2 before being considered for adoption.
Other business
Mayor Hillrey Adams announced that the Mountain Home Junior ROTC program has been selected to travel to Washington, D.C., on July 4 to participate in the Independence 250 celebration and parade. The program needs to raise approximately $56,000 to fund the trip and is seeking community support through fundraising events.
Adams also shared an update on the Mountain Home Community Center, reporting that as of Thursday morning the facility had signed up roughly 168 corporate memberships and about 60 individual memberships. Staff have been setting up at local businesses to register new members, including recent visits to Danfoss.
