Fort Smith Board approves Glatfelter bonds, more than $9 million in sewer work

The Fort Smith Board of Directors formally welcomed York, Pa.-based Glatfelter to the region with a series of resolutions Tuesday night (March 1) at its regular meeting from the Fort Smith Public Schools Service Center.

City Directors also approved close to $10 million worth of agreements related to the $480 million consent decree for violations of the Clean Water Act.

Leading off the night, the Board voted unanimously (6-0, in absentia Director Don Hutchings) to approve the issuance of Industrial Development Revenue Bonds in the amount of $75 million to help Glatfelter finance their investment in the former Mitsubishi plant.

Glatfelter will use the plant to manufacture fibrous paper materials like the kind used in wet wipes. The bonds are special obligations of the city, but they do not command city revenues or credit. Within 90 days, Glatfelter’s Bond Counsel will present a Bond Ordinance, a Lease Agreement, and a Payment-in-Lieu-of-Taxes (PILOT) Agreement to the city. The PILOT Agreement stipulates that Glatfelter will realize a 65% savings in property taxes.

Additionally, the Board unanimously endorsed entrance of Glatfelter into the Tax Back Program, a state economic incentive program available to new and expanding businesses that allows companies to receive rebates on sales taxes paid for the purchase of equipment or building materials used for development or expansion. Also, the Board voted to allow Mayor Sandy Sanders to terminate the previous Local Incentives Definitive Agreement with Mitsubishi and facilitate conveyance of the property to Glatfelter.

The company expects to employ 83 when it opens in late 2017. Average per hour wage is $25. The first shipments from the plant are expected in the first quarter of 2018. Glatfelter plans to spend up to $45 million in 2016 on the new operation, and the remainder in 2017.

CONSENT DECREE
Utilities Director Steve Parke presented two of his last consent decree proposals to the Board near the end of Tuesday’s meeting. The two projects totaled just under $9.7 million and, unlike an assortment of plans submitted throughout 2015, met with unanimous approval.

Before taking his seat, Parke was commended by Director André Good. Parke, who is retiring April 1 after several decades with the city, has become embattled over the last year due to his oversight of the $480 million consent decree against the city.

“I just wanted to say that you and your staff have done nothing but show a high level of professionalism and expertise in your field,” Good said. “I know the consent decree isn’t very popular, and we’re all catching flak because of it, but I think you and your staff did the best you could possibly do with this situation.”

Good’s commendation was met with applause from Parke’s co-workers in attendance, and was likely a welcome change of pace compared to previous interrogations from Directors Keith Lau, Tracy Pennartz, and Kevin Settle.

The most recent example of this took place at the Feb. 17 regular meeting when Parke faced an onslaught after sending through an $8.6 million proposal from Texas-based CDM Smith for implementation of the Program Management Information System related to the consent decree – one of two that were unanimously approved on Tuesday. Pennartz was unhappy that the city’s information technology department was not asked for input on the contract.

The decree, approved by the city in December 2014 after several years of negotiation, is likely to result in a tripling of water and sewer bills for all city customers on the Fort Smith system.

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 address remedial defects to eliminate dry weather overflows.

The time frame outlined in the city’s presentation of the proposed consent decree terms extend for 12 years, giving the city time to invest the needed funds to bring the sewer system up to standards.