FARMINGTON -- The sewer system serving Valley View Estates subdivision now has a valid Arkansas wastewater permit and the cities of Prairie Grove and Farmington have lifted their moratoriums on issuing building permits for the area.

Arkansas Department of Environmental Quality issued a no-discharge water permit to Washington County Property Owners Improvement District No. 5 that took effect June 1 and is valid through May 31, 2022.

The permit allows the district, which owns the Valley View community sewer system, to collect and store domestic wastewater and haul it to Prairie Grove for disposal and treatment.

"We are legal," said Jerry Kopke with Communities Unlimited.

The improvement district was placed in receivership with Communities Unlimited in May 2016, following a lawsuit filed in March 2016.

The lawsuit, originally filed by Washington County, cities of Farmington and Prairie Grove, Rausch Coleman LLC and Valley View Estates Subdivision Property Owners Associated, asked that the system be placed under a receivership because of the danger of harm to the health and safety of residents in the subdivision and the danger to the environment as a whole.

The defendants -- the improvement district and Valley View Golf, LLC -- have denied these claims. The lawsuit is pending in Washington County Circuit Court.

Circuit Judge John Threet selected Communities Unlimited to bring the system into compliance with state laws and obtain a new ADEQ wastewater permit.

The system's wastewater permit expired Jan. 31, 2016. The system has been operating without a permit since that time.

For more than a year, Farmington and Prairie Grove have not issued any building permits for the subdivisions served by the Valley View sewer system because the district did not have an ADEQ wastewater permit.

Larry Oelrich, director of Administrative Services and Public Works for Prairie Grove, said he has already notified one developer about the new ADEQ wastewater permit. The developer of Highland Greens, Phase 2, has been on standby because of the moratorium.

"They are going ahead with it," Oelrich said.

Highland Greens has about 30 residential lots. Oelrich said the city did not have any other developments on hold because of the moratorium.

Rick Bramall, Farmington's building official, also has put out the word about the ADEQ permit. At least one property owner already has indicated she will be applying for a building permit for a lot in Valley View Estates.

Bramall said the woman was not told about the moratorium when she purchased the lot. She has been waiting for it to be lifted.

Kopke said the ADEQ permit allows Communities Unlimited to go ahead with other plans.

"We've been able to do some preliminary plans but it gets to the point where you have to have the real thing," Kopke said, referring to the ADEQ permit.

He is submitting an application for a 30-year, low-interest loan from Arkansas Natural Resources Commission for $4.1 million.

The loan will be used to connect the Valley View sewer system with the city of Prairie Grove for an estimated construction cost of $2.1 million. The balance reflects past and future costs to continue to haul Valley View's raw sewage to Prairie Grove Wastewater Treatment Plant. The district is spending about $40,000 per month to haul wastewater to Prairie Grove. This includes the hauling fee and Prairie Grove's fee to treat the sewage.

The application also is asking Arkansas Natural Resources Commission to defer principal and interest costs to allow the improvement district time to increase its customer base.

Representatives from both the improvement district and city of Prairie Grove have been working on a draft contract for Prairie Grove to accept Valley View's wastewater.

Kopke gave an update on plans at the latest meeting of Valley View Estates Property Owners Association and tried to answer questions. Some unknowns, he said, are how long it will take to connect to Prairie Grove and how this will affect sewer fees paid by customers.

The important thing, Kopke said, is that during this whole process, customers have been able to use the sewer system and the system has not had any sewer overflows.

"We've kept it going," Kopke said.