The Fort Smith Board of Directors approved $5 million in consent decree items Tuesday night (March 7) at its regular meeting. The approvals prompted one city director to call for a reexamination of the decree’s stipulations in light of a new executive order signed by President Donald Trump.
Trump’s order could radically redefine a key federal rule of the Obama administration that is at the heart of the $480 million order signed by the Board in December 2014.
Also Tuesday, the Board approved “Tax Back” status for Mars Petcare resulting in what Deputy City Administrator Jeff Dingman estimates to be a $162,500 local tax incentive for the company’s manufacturing facility at Chaffee Crossing.
At the top of the meeting, the Board approved three consent decree items — more than $5 million in overall expenditures. Director Kevin Settle said the approvals reminded him of Dec. 16, 2014, when the Board signed off on the decree rather than fight it in court.
“In those discussions, I brought up the Waters of the United States (WOTUS) law. It is very broad, and the consent decree is very laced into that. During those discussions, I thought we should have gone to court, where we would have had the chance to make our case and give ourselves more time, just in case the law got changed, which brings me to what happened this past week,” Settle said, referring to President Trump’s signing of an executive order on Feb. 28 instructing a review of the regulation, which was issued during the Obama administration.
Settle said he wanted to thank Republican U.S. Sens. John Boozman and Tom Cotton as well as U.S. Rep. Steve Womack, R-Rogers, “for understanding how the Waters of the United States has affected our city and the rates on our public.”
“Once the definition (of WOTUS) is complete,” Settle continued, “I’d like to have us discuss what we can do in relation to our consent decree and court order, because I think once the definition is complete, some of our consent decree items will no longer be an issue.”
When signing the order, President Trump called WOTUS “one of the worst examples of federal regulation,” adding the Clean Water Act “says that the EPA can regulate navigable waters, meaning waters that truly affect interstate commerce. But a few years ago, the EPA decided that navigable waters can mean nearly every puddle or every ditch on a farmer’s land or anyplace else that they decide. … It was a massive power grab.”
The largest item in Tuesday’s approvals was a contract with Forsgren, Inc., for the replacement or rehabilitation of approximately 23,800 linear feet of sewer main, associated manholes, and other appurtenances. The project is designed to reduce sanitary sewer overflows (SSOs) by reducing ground water infiltration. Forsgren’s winning bid was $2.994 million.
The next largest item was for sewer system assessments (SSAs) for gravity sewer lines and manholes. It was awarded to RJN Group, Inc., in the amount of $1.746 million.
TAX BACK INCENTIVES
In other business, with Mars Petcare expanding itspet food products manufacturing facility located in Fort Smith at 10000 Roberts Boulevard, the company will invest $108.7 million in new equipment and renovations to existing buildings. The project will result in the design and construction of new production lines to manufacture and package wet dog food to meet additional capacity needs. It will include $10.5 million to expand the existing building and $98.2 million for process and packaging equipment for the new production lines.
Dingman calculated the $162,500 local tax incentive by estimating $5 million in eligible materials from the $10.5 million expansion total. From this figure, the city’s 3.25% sales tax would be refunded to the company. The total does not include an additional 6.5% state sales tax benefit, resulting in another $325,000 tax incentive on the same $5 million. Adding the two incentives places Mars Petcare’s overall tax benefit at an estimated $487,500.
City Director Tracy Pennartz said it was important for the public to understand that while the money will not be received in local sales tax, “it is what we do as a Board to participate in economic development with the hope it will come back to us through economic growth and jobs for our area.” The project will result in the addition of 130 jobs to the Fort Smith region with an average wage of $25.92 per hour, increasing Mars Petcare’s local employment by 64%.
The Tax Back program is a state and local sales tax refund incentive to attract business growth or expansion to Arkansas. The incentive applies to capital purchases associated with construction of new facilities or expansion of existing facilities, such as equipment or building materials. It does not apply to ongoing purchases.