HOT SPRINGS, Ark. – Water rates, water capacity, voter rights and city planning are in conflict in Hot Springs, and the city is drawing a line in the sand.

The City of Hot Springs announced Thursday that it would cease any new water connections if the effort to enact a voter referendum on water rates continues.

The board passed a rate increase at its Nov. 15 meeting of a $4 rate increase for residential water service in 2023 of $2 in January and $2 in November. The increase would fund a bond issue to improve the city’s water supply infrastructure.

When the board presented this plan, opposition was voiced during public comments. One opponent said a referendum initiative might occur if the board passed the increase, city leaders claim signatures are currently being gathered for a referendum.

Mayor Pat McCabe said a referendum would lead to a delay that would put bond funding and the project into question.

“We don’t know where interest rates are going to be…in September of next year. We can only imagine that construction costs will continue to go up, so that is going to add to the total project cost which is going to add to the total cost of the end user,” McCabe said.

City Manager Bill Burrough expressed similar concerns about the risk created by a referendum.

“When we think about that, we are at risk. We have overextended ourselves, but we took that risk because we knew we had a new plant coming,” Burrough said. “We now have a referendum in front of us. Signatures are being gathered to stop that $2 rate increase, which will be $4 over the next year.”

The city board passed a $100 million water infrastructure expansion plan in June 2020 to add capacity, including a new water plant. The bond issue passed at that time was expected to cover the expansion, but costs unexpectedly rose during the coronavirus pandemic and inflation issues which mandated the Nov. 15 increase, officials said.