Legal door closes on ‘true up’ issue

by The City Wire staff ([email protected]) 142 views 

On Tuesday night (Feb. 7), Fort Smith closed the door on legal action for past Van Buren water true ups.

But the door wouldn’t shut quietly.

Directors passed a settlement with Van Buren wherein both sides agree not to pursue any future legal action for past water true up adjustments.

Under the settlement, Van Buren will pay Fort Smith $581,000 in water rate adjustments for the years 2006-08. True up adjustments for 2009 and ‘10 — $253,000 owed by Van Buren and $30,000 owed by Fort Smith, respectively -—will not be paid.

The vote to pass the settlement was 5-2. Directors Philip Merry Jr. and George Catsavis voted no.

When citizens were given an opportunity to speak about the settlement, Fort Smith resident Elizabeth Mayo had several questions for City Administrator Ray Gosack.

Mayo asked why Van Buren was so late on paying true up adjustments for 2006-08. Gosack said the primary reason was that Fort Smith did not perform those true ups correctly. Van Buren pointed out errors in the adjustments, he said, and the cities had to call in a new water rate consultant to sort out the disputes.

Mayo asked how losing the $253,000 from 2009 would affect the City’s budget. Gosack said that amount had not yet been recorded as a receivable, so it was never part of any budget projections.

The 2011 true up, Gosack said, won’t be finished until Fort Smith completes an internal audit, which is expected to end in mid- to late June.

Merry said directors would “do a little trickle” around Aug. 1 to make sure the true up was being performed and reported correctly.

Before the vote, Catsavis asked City Attorney Jerry Canfield whether, by approving the settlement, Fort Smith would waive its right to pursue future legal action for the 2009 true up.

“It is a final settlement,” Canfield responded.

“Even if new information about 2009 comes to light?” Catsavis pressed.

“Yes,” said Canfield. “No future action can be taken.”

Canfield clarified that that statement would be true not only for 2009, but for all the years from 2006-10.

Merry pointed out that on Dec. 6 of last year, the Board voted to immediately pay Van Buren a $30,000 true up adjustment for 2010.

That adjustment was never paid, Canfield said, because Van Buren had determined that it was not owed by Fort Smith.

“They’re giving up their right to pursue that,” he said.

When it was Merry’s turn to vote, he halted the roll call, saying, “I think we should pay the $30,000 for 2010 that we owe. That’s why I’m voting no.”

According to a memo from Gosack, Van Buren will pay $397,000 as soon as the settlement is made official. The remaining balance of $184,174 will be paid in monthly installments throughout 2012, with the payment for January due immediately.

Directors approved new solid waste permits and agreements with four commercial haulers of solid waste — MSG Waste and Salvage, OK Foods, Circle S Waste and Salvage, and Sandifer and Sons Salvage.

Baridi Nkokheli, director of sanitation, reported in a memo last week that the four companies had either violated their agreements with the City or allowed them to expire.

While not specifically implicating any of the four companies, Nkokheli wrote that “certain haulers” were disposing of Fort Smith waste in landfills in eastern Oklahoma, where they could take advantage of lower taxes and disposal fees.

These violations of the solid waste agreements, Nkokheli wrote, reduced tonnage in the Fort Smith landfill, thus driving up disposal costs for Fort Smith citizens and other stakeholders.

When the City contacted the four haulers, each asked for a new permit and agreement in order to comply with City regulations.

The new agreements passed 7-0 as part of the Board’s consent agenda.