Fort Smith to credit Van Buren $441,603 for 2012 water charges

It was just 2011 when the city of Van Buren was refusing to pay a contested 2009 water charge of $253,000 to the city of Fort Smith. Since that time, it is now the city of Fort Smith that owes Van Buren more than $440,000 for water the city was overcharged in 2012.

According to Fort Smith Communications Manager Tracy Winchell, the cities of Fort Smith and Van Buren have a previously established agreement for rate adjustments, or a true up, that is evaluated at the end of each year.

Jeff Dingman, Fort Smith's deputy city administrator, said the amount of adjustment for 2012 would result in Fort Smith giving Van Buren an adjustment of $441,603. The amount, he said, would be spread out in credits to Van Buren of $36,800 during each of the next 12 months.

"Their (adjustment) for the year was about 11.5% of what their billing was," he said, adding that the city was charged about $3.048 million last year for water from Fort Smith's water supply.

Previous years have yielded much smaller adjustments once Fort Smith's utility department compares how much Van Buren was charged for water versus its usage. Information provided by Utilities Director Steve Park show an adjustment of $197,768 in Van Buren's favor in 2011 and another one of $30,884 in 2010.

The dispute in 2009 where Fort Smith said Van Buren owed $253,000 was eventually dismissed due to Fort Smith's failure to comply with contractual obligations with regard to the bill, resulting in no adjustment to Van Buren's 2009 bill.

Prior to the 2010 adjustment in Van Buren's favor, the city owed Fort Smith additional funds for using more water than it had been originally billed for as a wholesale customer — $124,721 in 2008, $129,227 in 2007 and $327,226 in 2006.

Winchell said the numbers show a basic truth about the water contract between both governments.

"At the end of the year, one almost always owes the other money," she said.

Dingman said the contract with Van Buren, it's only true up customer, and other wholesale water customers could be up for discussions in the coming year or more.

"As we're working more toward the consent decree that will (demand more) of the city, we will need to go through all of our rate structures and sewer (rates). It will include revisiting how wholesale agreements with Van Buren and all other wholesale customers work."

Fort Smith has been under a consent agreement with the U.S. Department of Justice since the 1970s due to problems associated with wastewater runoff. A collection of projects to bring the city of Fort Smith into compliance with DOJ demands will see a final price tag once all is said and done, Dingman said in December 2013.

He said the consent decree, which is in the process of being negotiated with the DOJ, should be announced during the first quarter of 2014.

But as for the overage the city of Fort Smith will have to credit Van Buren during the next year, Dingman said $441,603 was not an overage.

"There's no discrepancy," he said. "It's just the way it works."