Fort Smith board tables connection fee increases

The Fort Smith Board of Directors quickly moved Tuesday night (May 17) to table a vote on increasing water and sewer connection and service fees first proposed during November 2010 city budget hearings.

Fort Smith Utilities Director Steve Parke told the directors in November that many of the fixed costs have not been raised for years. For example, an industrial user permit has not changed since 1989. The charge to connect a typical residential user has not changed in many years, with the $300 fee not covering the average $700 expense to physically create the connection.

Parke and City Administrator Ray Gosack reiterated those thoughts in explaining the proposed connection and service fee increases. Gosack said many fees have not been raised in more than 20 years, “and some not adjusted in more than 40 years.”

Examples of fee adjustments include:
• 1 inch water line, street crossing cut — Existing fee, $870, with proposed new fee: $1,315;
• 2 inch water line, street crossing cut — Existing fee, $1,650, with proposed new fee: $2,020; and,
• Sewer service install, street crossing cut — Existing fee, $1,300, with proposed new fee: $1,800.

The fee changes also include costs for testing water samples from industrial users. For industrial users, testing (sampling) fees will increase for the average (typical) user from $68 per month to $189 per month. For larger industrial users, the average (typical)  fee could increase from $68 to $379.

However, several property developers and members of the Greater Fort Smith Association of Homebuilders were at the meeting to oppose implementation of the new fee structure.

Dave Hughes, executive director of the Homebuilders, said the association has “had a good relationship with other city departments,” but was not asked by Parke to be involved in this effort.

“We were not included in this discussion,” Hughes said, adding that he understands the city needs to recover costs.

But he said the timing and the large increases will be tough for the industry.

“At a time when we are struggling … we’re hit with a 100% increase on the water tap,” Hughes said. “We’re very concerned with these radical increases at such a time in our economy. … It needs to be graduated. It needs to be implemented in such a way that our industry can absorb these increases.”

City Director Pam Weber moved to table a vote on the fees for up to 60 days.

“I understand that we as a city have to recover our costs … but we need to do a little bit of education,” Weber said.

Hughes agreed to pull together a special committee of Association members to work with city staff on a possible compromise plan.

David Harris, a Fort Smith citizen who regularly attends board and other city meetings, complained that not moving on the fee structure pushes the cost of subsidizing water and sewer service for the real estate industry onto all citizens.

“As long as these fees charged don’t cover the expenses, then all of us other stakeholders are paying” for the builders and developers who get services for less than it costs, Harris told the board. “The (fee increase) percentages are excessive because there has been pressure to not raise them all along.”

Weber’s motion to table the fee change was approved 7-0.

“I’m pleased. You know, we just wanted to be at the table,” Hughes said after the vote. “When you’re dealing with such critical margins right now in this industry, this (fee increase amounts) could have been particularly devastating.”