Donald Trump and Fort Smith consent decree, employee pay highlight night two of budget hearings

The upcoming administration of President-elect Donald Trump could alter the $480 million federal consent decree leveled against Fort Smith, according to City Administrator Carl Geffken.

Fielding a question from City Director George Catsavis at Thursday night’s (Dec. 1) budget hearing, Geffken said a Trump administration “could portend well for us,” though he emphasized it will be the city’s aim to continue compliance with the Department of Justice (DOJ) and Environmental Protection Agency (EPA) judgment against the city for years-long violations of the federal Clean Water Act.

The 12-year window for implementation forced the city to raise sewer rates drastically (as much as 167%) since May 1, 2015.

During the campaign, Trump talked about “dismantling” the EPA. While final action may not be so drastic — and “not something I would suggest,” Geffken told Talk Business & Politics — Trump’s comment had Catsavis wanting to revisit the consent decree “as soon as possible.”

By January 2017, the average bill of a Fort Smith customer for sewer alone will total $47.91, up from $19.63 prior to the hike with the purpose of funding the federally mandated upgrades that are already underway.

Making matters worse, Interim Utilities Director Bob Roddy of the consulting firm Burns & McDonnell — fielding a question from City Director Andre Good — confirmed “at some point in the future, it is my opinion you will have to look at water (rates) as well.”  While no such increases are being budgeted in 2017, the possibility echoed a similar discussion the Board had with Roddy in October.

Meanwhile, Geffken said, “We’re looking to see what the impact is to the city to implement the consent decree and to see if there is a better and more cost efficient way to achieve those goals while making sure our citizenry are not being charged at an excessive rate.”

Referring back to Catsavis’ Trump question, Geffken noted the city has been keeping U.S. Rep. Steve Womack, R-Rogers, and U.S. Sens. John Boozman and Tom Cotton, R-Ark., updated on consent decree developments.

“All three are very interested in what is going on,” he said.

One specific item the city is looking into to help relieve pressure are federal fines imposed within the decree.

“What we’re trying to do with the stipulated penalties that have been assessed of $120,900, is to say, ‘Hey, why are we sending that money to Washington? We’re already in the consent decree. We’re doing everything correctly.'”

Geffken continued: “Many consent decrees don’t have you pay fines once you’re into the mandates because it’s duplicative. You’ve got me in a consent decree. I’m doing the work, and now you’re going to charge me fines on the issues I’m already working on?”

In a phone call with the EPA, Geffken said that he asked the agency to “let us spend that in the city” because “our residents are paying much higher rates and having to write a check to Washington.”

NARROW MARGINS, EMPLOYEE PAY
Also Thursday night, the Board reviewed 2017 recommendations for the general fund. Revenues are budgeted at $41.539 million against $41.526 million in expenditures — $30.452 million for personnel, $9.875 million in operating expenses, and $1.197 million in capital outlay. Police and fire account for 62% of the general fund budget ($15.009 million Police, $10.692 million Fire). City Finance Director Jennifer Walker projects an excess in revenue over expenditures of just $12,971 for the year ahead.

The city’s continued push toward budget cuts will likely rule out any salary increases for employees in 2017. In an exchange between Geffken and City Director Tracy Pennartz, the city head urged “consistency in government” and said to do either $800,000 (the amount needed for step increases) or zero.”

“Then it’ll probably be zero. It’s not that we don’t want to do them, but where is the money going to come from?” Pennartz said.

Geffken agreed and said city employees “will continue to do their jobs” and “they understand the reasoning behind it.”

“That means that maybe we can have that much more money in the fund balance to shore up our finances. It could still be a good benefit,” he said.

Pennartz said it was “important to talk about this because the public needs to understand what stresses we face in the general fund. If we don’t talk about the fact there is not enough revenue to cover expenses, they won’t understand.”

While salaries are likely to remain stagnant, overtime pay from 2013 to 2015 has trended upward, hitting $2.327 million last year from $2.021 million in 2014 and $1.926 million in 2013. Water/Sewer ($649,510), Fire ($577,542), Police ($518,387), Sanitation ($330,351), and Streets ($107,463) were the largest line items for overtime pay in 2015.

The Board will finish budget hearings on Monday, Dec. 5, from the Bartlett Community Room of the Fort Smith Police Department. The meeting will begin at 6:30 p.m.