EPA settlement will not change rates for Fort Smith wholesale water users
by January 6, 2015 5:29 pm 147 views
Van Buren and other wholesale water customers of the Fort Smith water system will not see their rates change to help pay for the estimated $480 million Fort Smith will have to invest by 2026 as part of an agreement with the federal government.
Settling with the Environmental Protection Agency and the federal Department of Justice on problems related to the city’s violations of the Clean Water Act could result in a tripling by 2026 sewer bills for all city customers on the Fort Smith system. Sewer bills for Fort Smith residents could grow from an average of $40 per month to up to $120 by 2026. If a sales and use tax is implemented in 2020, the monthly rate may only increase to $103 by 2026.
The EPA alleged that the city violated the Clean Water Act because of failure to properly operate and maintain its sewer collection and treatment system. Since 2004, Fort Smith has had more than 2,000 discharges of untreated sewage from its municipal sewage system, resulting in more than 119 million gallons of raw sewage flowing into local waterways, including the Arkansas River, according to an EPA statement.
Fixing the failures won’t be cheap. The estimated $480 million settlement includes $375 million in capital costs. Of that, 39% ($145 million) is for defect remediation, 17% ($63 million) for capacity remediation, 12% ($45 million) for pumping improvement and 10% ($37 million) for engineering and professional services. Treatment, capacity assessment and current projects are also included in the capital costs.
In January 2014, Fort Smith Deputy Administrator Jeff Dingman said future negotiations with wholesale customers of the Fort Smith water supply may include rate increases to help pay for a future settlement with the EPA and DOJ.
"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,” Dingman said in January.
However, Dingman said recently the emphasis of the settlement shifted entirely to sewer issues which does not include water customers.
“Considerably more is now known about the final scope of the consent order than was known in January,” Dingman noted in an e-mail to The City Wire. “There will definitely be sewer rate modelling and proposals for adjustments to sewer rates based on the consent decree, but there is no reason to believe that this sewer rate work will have an impact on wholesale water sales agreements already in place.”
According to Dingman, 27% of total Fort Smith water revenue was from wholesale users in 2013. He said that is “pretty typical” of annual usage.