South Hot Springs Got a New Water Plant. New Homes There Now Pay to Connect to It.

Since July 1, 2026, a new house that ties into Hot Springs water and sewer pays a one-time impact fee to each system. Under the old rules, the same house paid a $500 wastewater fee and nothing for water. The Hot Springs Board of Directors approved both ordinances on May 5 by a 5–2 vote. The water ordinance is the city's first-ever water impact fee. The wastewater ordinance raises a fee that had been $500 since 2004.

On the South Side, this change has a physical address. The water those fees pay for is treated at 125 Randall Road, off Amity Road. From there it travels a new main along Highway 290 and Carpenter Dam Road. If you're weighing an existing South Side home against land or a new build in the same area, those two prices are no longer on equal footing. The new build carries a utility cost at the start that the existing home never sees.

What a new connection costs now

The proposal the board took up in the spring set both fees at $2,000 for a standard 5/8-inch residential meter. A larger meter paid more on a sliding scale, up to $160,000 for an 8-inch meter. At the May 5 meeting, directors swapped in an alternative the minutes call "scenario #2," which "lowers the base fee to $1,000." A second amendment kept that reduction for 5/8-inch and 1-inch meters and gave the larger sizes no reduction.

The rate study behind the ordinances gives a sense of scale. As the Sentinel-Record reported in March, Willdan Financial Services, the city's consultant, found the city could charge as much as $11,174 for a new residential water meter and $10,674 for a new residential sewer connection.

For an ordinary new house, the adopted base fee comes to about a tenth of what the study said the city could justify. According to the May 5 minutes, the vote to lower the fee to $1,000 passed 4–3, and an attempt to push the whole matter to June failed. The Sentinel-Record's May 10 report ran under the headline that the new fees "make allowances for affordable housing."

Why the cost lands on new connections

The city has been paying for a lot of capacity. According to the Sentinel-Record, ratepayers had paid $155,829,811 to develop the Lake Ouachita supply as of March 2026, not counting interest. The 2023 debt issue that covered cost overruns pushed the water fund's debt above $300 million, and customers will be paying it down into the early 2050s. When wastewater is added, the paper put the combined obligation at more than half a billion dollars.

Mayor Pat McCabe stated the reasoning plainly during the March debate, as the Sentinel-Record reported: "Impact fees are for those who create new demand. ... I'd hate to see existing customers be greatly impacted because something new comes in and uses the unused capacity, requiring another expansion with our plant."

That's how the charge works. An existing home has been paying for the Lake Ouachita project a little at a time through its rates. Monthly base charges went up in two $2 steps in 2023 to secure the extra debt. A new connection pays its share up front. Builders argued in March that this cost would reach buyers. In the same article, the Sentinel-Record reported that homebuilders told the board the fees would "curtail home construction" and would pile onto existing charges, including the cost of extending utilities to a lot.

The spare capacity the fee is charging for sits off Amity Road

The South Side matters here because of what was built there. The 15-million-gallon-a-day plant on Randall Road had its ribbon cutting on April 6 and started delivering water this spring. Its treated water runs through a 13-mile transmission main. The last 9 miles are 24-inch pipe running south of the Carpenter Dam Bridge and along Highway 7 South and Highway 290. The main joins the 20-inch line on the King Expressway at Shady Grove and Brodrick Street, which fills the 3-million-gallon elevated tank behind Cornerstone Market Place. The water starts in Lake Ouachita and flows by gravity through a 2,569-foot tunnel in Blakely Mountain. That design helped the project win the 2026 Arkansas Environmental Federation Diamond Award, which the city announced on October 14.

This summer was the first real test. The Sentinel-Record reported in August that system production peaked at 22.8 million gallons on July 31, 2026, 11.1% above the previous July's peak day. Through the first three weeks of August, the new plant averaged 5.7 million gallons a day, about a third of its rating. The nearly 60-year-old plant on upper Lake Hamilton averaged 14.5 million gallons, about 70% of its rating. City Manager Bill Burrough told the board that without the new plant, "we would've been back where we were in 2012, where we would see tanks falling quicker than we could fill them up," and added, "We have no voluntary or mandatory conservation."

So two-thirds of the new plant's rated output went unused on some of the hottest days of the year. That unused capacity is what an impact fee charges for. The mayor's concern was that new demand would fill this room and force another expansion, and the fee is meant to make the people adding that demand pay into the system that absorbs it.

Outside city limits, the main may still be the owner's to build

The extra capacity changed a second rule that matters most to South Side land buyers. In March, the Sentinel-Record reported that the Lake Ouachita supply was the basis for a 2021 interlocal agreement with Garland County. That agreement settled a long dispute over utility access in the unincorporated county, and the added capacity let the city loosen its restrictions on water extensions and connections outside city limits.

Loosened restrictions don't mean a free connection. As drafted, the water and wastewater impact fee ordinances cover the full service area, including the parts of unincorporated Garland County the systems serve. A buyer looking at acreage off Highway 290 or Carpenter Dam Road should expect several separate costs:

1. A $150 application fee for a single-family connection. It's credited toward costs if the application is approved and kept if it's denied.
2. A main extension, where needed. The city's water specifications say that when no main is next to the property, the owner or developer extends one at their own expense, built to utility standards. A tap is allowed only on a main the utility has formally accepted.
3. Possible system modeling. The city can tie approval to service availability, fire protection and system capacity, and it can require a modeling study paid for by the applicant.
4. The impact fee for each system you connect to. The water fee and the wastewater fee are assessed separately, so a lot that ties into city water alone triggers the water fee.

On a lot that sits right on the new 24-inch line, item two may cost nothing. On a lot a quarter mile back, it can easily cost more than the impact fee. The fee is the same for everyone, and the extension cost depends entirely on where the parcel sits.

Reading a South Side comparison with this in mind

An existing South Side home is already connected, so its share of the Lake Ouachita debt shows up in the monthly bill. A new build or a raw lot carries that share up front, and the amount depends on the meter size, whether the lot needs sewer, and how far it is from an accepted main. Two properties with the same asking price can end up with very different total costs.

Before you write an offer on land, ask the questions the city will ask: where the nearest accepted main is, whether the lot will connect to sewer, and what meter size the planned house needs. On a builder's spec home, ask whether impact fees were already paid and under which schedule. The board set the new fees to take effect July 1, 2026, and the city can confirm how that date applies to a particular plat or permit.

A few quick answers

Does an accessory dwelling unit pay the full fee?

No. The May 5 board packet notes that under Ark. Code Ann. § 14-56-205, impact fees for an accessory dwelling unit are capped at $250 for each system. The city can confirm how that applies to a specific property.

Why does a big meter cost so much more?

The schedule scales by meter ratio, and an 8-inch meter counts as 80 residential meters. According to the Sentinel-Record, Burrough said Oaklawn is the only city utility customer with a meter that large.

Is the city's older lakeside plant still in use?

The Lakeside Plant at Lake Ricks has been offline since late April, and the city plans to decommission it. The upper Lake Hamilton plant is still running, and like the new plant it draws from the Lake Ouachita allocation.

This post is general information, not legal, tax or financial advice. Before you commit to a lot or a build, confirm the fees and connection requirements for your specific property with the City of Hot Springs utility department and the right professionals.

If you're comparing an established South Side home with land or new construction near the new Highway 290 main, 501 House to Home can help you work out what each option really costs once utilities are included. If you already own on the South Side, start with a free home valuation and we'll show you how your connected property compares with the new builds going up around it.