Fort Smith Board pushes back against utility charges, seeks fewer ‘11th hour’ votes

by The City Wire staff ([email protected]) 153 views 

The Fort Smith Board of Directors denied another request from Steve Parke, the city's director of utilities, Tuesday night (Oct. 6) at its regularly scheduled meeting from the Fort Smith Public Schools Service Center.

Scrutinizing Parke's negotiations with engineering companies has become something of a pastime for City Director Keith Lau and Tuesday's meeting was no exception. Parke brought a retooled scope of services proposal from Hawkins Weir before the Board after getting it shot down at the Sept. 15 meeting. The plan is part of the estimated $480 million EPA consent decree against the city for violations of the Clean Water Act.

Lau grilled Parke on what procedures he had in place to tell engineering companies ahead of time the types of costs the city would/would not be willing to pay. Lau was particularly dissatisfied that Hawkins Weir’s $420,240 in total estimated reimbursable expenses were still part of the plan.

Lau said different billing rates of Hawkins Weir (around $180 per hour) and Mickle Wagner Coleman, Inc., ($144 per hour), confirming with a Mickle Wagner representative that some of the cost in reimbursable expenses for Hawkins Weir were factored in to MWC’s hourly rate, and telling Parke he had “no basis for comparison” to know if he was getting a good deal.

“I think we need that level of detail,” Lau said. “I don’t deny it that you deliver a good product. The problem is, I don’t think we’re on top of our cost control processes. I’m looking at my administrator and my department heads to do that, and I’m going to hold them accountable for that. I don’t want to wait until we get into the eleventh hour where we’ve got a deadline looming.”

Lau then asked his fellow Board members how many times these “eleventh hour” situations arose in his two and a half years on the Board.

He continued: “Almost every major decision has to be made at the eleventh hour. I don’t want that any more. I want proactive (department) representatives. Just because we’ve done it that way since the dawn of time doesn’t mean that it’s right. I need somebody who’s going to focus on controlling costs and reducing this $480 million bill. I’m sure we deliver a great product, but we’ve got to deliver it efficiently and at as much a savings to the taxpayer as possible.”

Originally requesting $2.088 million for engineering services associated with Wastewater Pump Station/Force Main Evaluations throughout the city, Parke had managed to get Hawkins Weir down to $1.888 million, though that $200,000 reduction wasn't as impressive when reading the fine print.

According to Parke’s memo to the Board, the proposal was just a revised scope from Hawkins Weir in which certain necessary costs from the company’s markup — outside printing, utility contractor assistance, abstract company, ARKUPS utility locating, and soil testing sub-consultant services — totaled around $172,000. Parke said that all of these components would be necessary, and that it would now be the city taking on those costs/services directly.

Noticing the discrepancy, Vice Mayor Kevin Settle pointed out the new proposal only came with a reduction just north of $28,000 to the original plan. Settle joined with Lau as one of four “no” votes — the other two being Directors Mike Lorenz and George Catsavis.

Once Parke can finally get the scope of services approved by the Board, it will take 24 months to carry out the stages. Considering a looming deadline of March 31, 2018, the city is running out of time, and additional penalties could be incurred as a stipulation of the consent decree should the city fail to comply.

In other actions Tuesday night, the Board voted 4-3 (Lau, Lorenz, Pennartz, and Settle affirming) to reduce the grace period that Fort Smith residents have for late utility bill payments. Now failing to pay your bill more than 35 days past your billing statement date (as opposed to 63 days) could get your water shut off.

While the plan is not expected to raise any additional revenue, it is expected to make the revenue collection process easier. The ordinance takes effect January 1, 2016, and the city will be spending the next months preparing citizens for the change through regular mail and social media campaigns.

Directors Catsavis, Andre Good, and Don Hutchings voted against the ordinance, stating it would place a hardship on senior citizens and individuals/families experiencing financial difficulties. While Lorenz touted the move as a sound business decision, Good said he agreed that it was a business decision, “but not all business decisions are good for the public.”

Mayor Sandy Sanders confirmed after the town hall meeting that there would be no veto, feeling the phase-in period and the existing assistance program would be reasonable enough for compliance.

The city does expect a slight uptick in shutoffs but noted that citizens can work with their service department to get a single extension if unable to pay on time. Director Catsavis estimated there are between 500 and 600 shutoffs a month on average and feared that the number would grow under the change.

Last but not least, the Board approved a resolution endorsing General Pallets, Inc., and the Arkansas Colleges of Health Education into the Tax Back Program.

General Pallets is investing $1.5 million in new equipment and building renovations at 611 South 4th Street. The company is also adding 20 new jobs at an average wage of $13 per hour.

The Arkansas Colleges of Health Education are investing $30.45 million in new buildings and equipment at 7000 Chad Colley Boulevard and adding 80 new jobs with an average wage of $43.43 per hour.

The Tax Back Program allows for new or expanding businesses to request refunds of sales taxes paid on new equipment, building materials, and other eligible expenses incurred due to construction or expansion.