Fort Smith sewer rates to decline

Fort Smith officials announced Monday (July 2) that the sewer rate will decline 12 cents per ccf per month beginning in July — or a little more than $14 a year for some residential customers.

In July 2009, the Fort Smith Board of Directors approved a supplemental rate increase to make interest payments on bonds related to federally-mandated sewer system improvements.

According to Monday’s city press release, the initial maturity date for the bonds was Sept. 1, 2014. The additional rate was in place for only 3 years, and is ending 27 months earlier than anticipated. The 2009 ordinance required the automatic termination of the rate once the pledge of sales tax revenues for the bonds was released. Because of that trigger, no board action is required to implement the rate reduction.

The relief comes from voter approval in March of a 1% sales tax extension. Voters were asked to extend the use of a 1% sales tax to refinance bonds related to water and sewer system improvements, pay for the issuance of new bonds and support operations of the Fort Smith Fire Department and Fort Smith Parks & Recreation Department.

The tax extension is estimated to finance more than $112.56 million in new bonds and potentially direct $45 million in 10 years toward the operations of the city’s Fire Department and Parks Department.

Fort Smith City Administrator Ray Gosack said residential sewer usages ranges between 5 and 10 ccf per month, meaning the rate reduction will on average range between $7.20 and $14.40 per household. With the rate reduced 27 months ahead of schedule, the total reduced cost per average household ranges between $16.20 and $32.40.

“We made a plan three years ago for these bonds, and by sticking to the plan, we’ve done what we promised, and that promise is ending the supplemental sewer charge,” Gosack said.

The reduced rate provides some relief from rate increases that went into effect January 2011

The Board in late 2010 approved a 5% water rate increase to help cover cover a 110% debt covenant threshold on about $15 million in debt service requirements. Initial estimates indicated the 5% increases would result in a monthly increase of $1.40 for water and sewer use of 5 ccf (each); a monthly increase of $3.02 for 10 ccf; and a $6.31 monthly increase for 20 ccf.