Fort Smith monthly residential sewer rates may rise from $20 to $53 by 2017

Monthly Fort Smith sewer bills that could rise from an average of $20 per month to $53 a month by 2017 and a lower than expected increase in city staffing were just a few items presented Tuesday (Feb. 24) to the Fort Smith Board of Directors related to the city’s estimated $480 million settlement with the feds over Clean Water Act violations.

The agreement between the city of Fort Smith and the Department of Justice and the Environmental Protection Agency requires extensive investments in new infrastructure and ongoing maintenance activities to bring the city in compliance with the Clean Water Act.

The estimated $480 million includes $375 million capital costs and $104 million in additional operations and maintenance expenses. While the proposed settlement between the city and the DOJ is complex, the primary purpose of action is to increase capacity to eliminate wet weather overflows and fix defects to eliminate dry weather overflows. The agreement gives the city 12 years to invest the needed funds and do the work to bring the sewer system into compliance.

David Naumann, a project manager with Kansas City, Mo.-based Burns & McDonnell, opened the presentation with the bitter pill that to cover part of the settlement costs the average residential sewer bill will need to rise from $19.63 now to around $53 by 2017. Industrial and commercial bills would see a similar increase, he said.

The Burns & McDonnell report compared Fort Smith with 20 other cities based on similar population, or those facing similar federal agreements. The survey found that Fort Smith rates were the third lowest in the group. As an example, the survey showed Bentonville residential sewer rate averages at $50 per month.

Raising the rates to around $53 a month by 2017 would put Fort Smith in the middle of the 20-city pack, Naumann said. Bob Roddy, a utility consultant with Burns & McDonnell, reminded the Board that “full compliance” with the federal agreement will see the city moving from $10 million a year in capital costs to $30 million a year over the 12-year effort. That increase is driving the higher sewer rates, Roddy said.

“This is an aggressive schedule,” Roddy told the Board.

The historically low sewer rates in Fort Smith, as indicated by the Burns & McDonnell report, is why the city is facing the federal order, City Director Mike Lorenz said later in the presentation. Not having a rate structure to cover the costs of expanding and maintaining a sewer system has caught up with city residents, Lorenz said.

“That explains so much of our problems right now,” Lorenz said in discussing the city’s low rates compared to the other cities. “It’s not about what our rate is, it’s about what our rate should have been.”

On a possible good note, early estimates of having to increase city staff by 82 people was reduced to 75 in the Burns & McDonnell report. The report estimates 45 positions will be added in 2015, 22 in 2016 and 8 in 2017. Burns & McDonnell looked at survey data from 100 municipal utility departments to estimate a necessary workforce. The city’s utility department now employs 196.

Increased staffing is needed to meet the significant “capacity management operations and maintenance” (CMOM) required by the federal order. The order includes the city either engage or improve efforts at root control, reduction of fats, oils and greases (FOG) from sewer lines, add new tools to improve system maintenance and move the department from reactive work to pre-emptive work.

For example, the order requires 60 miles of the sewer system receive routine cleaning and 45 miles reviewed television inspection. However, no routine cleaning or YV inspection is now performed on the system. The federal order also requires 1,505 manhole inspections performed annually. The city now does not conduct manhole inspections.

The Burns & McDonnell report suggested the city needed more engineering and planning staff to help move the utility department from a reactive stance to a proactive department. Of the 75 new positions, Burns & McDonnell said 26 should be in management. City Director Kevin Settle, an industrial engineer, disagreed with the report saying he doubted that one-third of the new employees should be in management.

The Board is expected at its March 3 regular meeting to consider an ordinance setting a new rate structure, and a resolution calling for a public hearing. Arkansas law requires cities to propose a rate structure in one meeting and hold a public hearing in a second meeting prior to voting on rate increases.