The Fort Smith consent decree: How it got here, and what happens next

by Aric Mitchell ([email protected]) 1,236 views 

Fort Smith City Administrator Carl Geffken knows he has a sizable task on his hands navigating the city’s federal consent decree for years-long violations of the Clean Water Act, and a major part of the effort will entail telling the city’s side of the story.

Geffken took the job from acting City Administrator Jeff Dingman in May 2016. Dingman went back to his post as Deputy City Administrator after serving in the acting role from the time former administrator Ray Gosack stepped down in July 2015 until Geffken’s first day on the job.

The new city head had to be a quick study while working to fill vacant Fire Chief, Police Chief, Human Resource Director, and Utilities Director slots. The UD was particularly relevant to the consent decree issue as longtime director Steve Parke retired April 1, about one month before Geffken’s first day. In Parke’s final days, he was a frequent target of the Board for his connection to the consent decree.

Parke handled the city’s wastewater system for several years, including during the 1990s when many of the violations Fort Smith residents are now paying for were first being targeted for further review by the U.S. Environmental Protection Agency (EPA). The strong feelings the Board had towards Parke’s department were summed up by Director Keith Lau when Parke retired. While he told Talk Business & Politics his frustration with Parke “was not personal,” Lau added it was about the city “needing the right person to execute an almost half-billion dollar consent decree from the EPA and the DOJ. … I just didn’t think Steve Parke had the right skill set for that.”

Parke is no longer around to make a defense, but as Dingman pointed out in a January interview with Talk Business & Politics, he was not the only person, who knew of the city’s issues.

“Since at least 1982 when the first consent decree was issued, the Board has been aware of this process.”

By “this process,” Dingman is referring to the violations in the city’s wastewater system, though, like Parke, the Board of ’82 is no longer around to offer explanation. It is in between this “blame game” of sorts and the city’s need to address current consent decree issues where Geffken finds himself. He acknowledges the city “could have been more proactive — cleaning, looking at pipes, replacement, we could have done that,” adding that “if enough was done, we wouldn’t be in a consent decree.”

But at the same time, he knows the city is in a position it cannot maintain. He also knows there has been an effort toward compliance from the beginning as well as inconsistency from the federal government, and he is hoping those ingredients can serve the city well in a new presidential administration by getting the deadline extended for ratepayers, many who face exorbitant rates relative to median household income (MHI).

Putting into perspective the drastic sewer rate increases, Geffken points out from 2006 to 2017, average total sewer charges per bill have risen from $16.49 to just under $48, an increase of around 190%.

Fort Smith City Administrator Carl Geffken

As drastic as that sounds, however, it doesn’t fully illustrate the severity for two reasons. First, after reaching a peak of $20.67 in 2011, rates eased downward, hitting a low of $18.10 in 2014 before shooting up to their current state. As a result, in just three years, the average resident has seen an increase of roughly 165% from what they were paying for sewer services.

Second, the calculation is based on average use of 4,200 gallons per bill. For families that use more — 10,000 gallons per month is not uncommon for larger units — the total would be significantly higher.

Furthermore, this does not account for water rates, which, according to former Interim Utilities Director Bob Roddy of consulting firm Burns & McDonnell, “will have to be looked at” to help meet the demands of the consent decree. Also, the considered “normal” range for sewer rates pursuant to MHI is 1.2%-1.6%. Fort Smith is at 2.2%.

It is worth noting previous Boards – including those in the last 10 years – demonstrated a reluctance to raise sewer rates despite knowing the intense scrutiny coming from the federal government.

As Dingman alluded, there was a previous consent decree before the existing order. An order stemming from April 1983 found the city to be discharging polluted water in violation of effluent limitations set in EPA permits covering the city’s two sewage treatment plants. After extended negotiations, the city, the state of Arkansas, and the federal government entered into a decree requiring the city, among other things, to achieve specified effluent limits with respect to the secondary treatment operation of one of the plants by April 1, 1984.

On April 26, 1985, a Judge in the 8th Circuit U.S. Court of Appeals ruled in favor of the city to have the compliance deadline extended to Jan. 15, 1987, when it was found after the agreement had been signed that existing secondary treatment facilities were not adequate to serve the decree’s demands as previously thought. After further research, the city found it would have to do substantial construction in order to achieve the specified effluent limits. When the government would not approve the extension, the city asked the court to modify the decree, but was initially denied.

Two years following discharge of the previous consent decree, the city was slapped with an administrative order signed in December 1988 that went into effect the following year. It was this order that would metastasize into the consent decree of today. But the order itself — still technically “open” when the federal government renewed its interest in the city’s violations in 2005 — was not simply enacted and forgotten. It was nurtured along by a string of additional orders throughout the 1990s.

The first order — AO-VI-89-1218 — set aside a list of corrections the city was to address starting Jan. 1, 1989, and ending July 1, 1994. There were only five directives on the list, but it would eventually beget follow-ups in 1990 (AO-VI-90-191); 1991 (AO-VI-91-1248, with an extended closing date to July 1, 1995); 1992 (AO-VI-92-1310, with extended list of demands and Oct. 1, 1997 closing date); and 1997 (AO-VI-97-1215, which cited the city for “effluent violations which occurred between March 1995 and January 1997” as well as the added violation of “bypassing the treatment plant and at various locations in the collection system”).

The 1997 order also required the city to develop, in concert with Arkansas Department of Pollution Control & Ecology (ADPC&E) and EPA, a plan and schedule for bringing the city into compliance with the terms and conditions of its National Pollutant Discharge Elimination System (NPDES) permit.

By May 18, 1998, it was inspection time, and once again, things did not go well. A Jan. 21, 1999, administrative order stated “the secondary treatment (activated sludge) is bypassed when the influent flow reaches about 12 MGD. At somewhat higher flows, the primary treatment is bypassed. Due to Ft. Smith’s deteriorated collection system, I/I (Infiltration/Inflow) flows are very high resulting in frequent partial bypasses of the treatment plant. All of the bypassed flow joins with the completely treated flow in a concrete channel leading to the Arkansas River. The city samples and analyzes the combined flow but fails to report its quality on the DMR; only the quality of the treated flow is reported.”

The 1999 order then lists 19 excessive I/I-caused “bypass events” that were “consistent with a pattern of reported bypasses at this plant going back several years.”

Samuel Coleman, director of Compliance Assurance and Enforcement Division, signed off on AO-VI-99-1204, setting an expanded 10-item list with due dates starting on Jan. 1, 1999, and ending on Jan. 1, 2013. To sum up, what started as a five-point list with the 1988 administrative order ended up doubling in size, taking final demands from an initial due date of July 1994 to January 2013.

Furthermore, a new administrative order, CWA-06-2005-2139, would hit the city in 2005 calling for the removal of 22 sanitary sewer overflow relief pipes that channeled water in heavier rainfalls outward to creeks and ditches in an effort to prevent backups into residents’ homes. The order gave the city only 30 days to comply.

Through all of the attention, sewer rates remained artificially low. According to a rate study from Black & Veatch, a residential typical bill at 3,750 gallons of billable usage – keeping in mind Fort Smith is higher at 4,200 – was $26.03 in 2013, the study’s last year of recorded data. Fort Smith, that same year, had a rate of $18.59 making it roughly $8 lower at a higher amount of billable usage, and that number fell from 2013 to 2014.

Following is a year-by-year recap of Fort Smith’s total sewer charges per bill from 2006 to the present.

2006: $16.49
2007: $16.59
2008: $17.66
2009: $18.46
2010: $19.35
2011: $20.67
2012: $19.22
2013: $18.59
2014: $18.10
2015: $24.68
2016: $39.63

As Roddy told Talk Business & Politics before handing off the reigns to newly hired Utilities Director Jerry Walters, “it’s the nature of humans. There is a built-in rate increase aversion. No one wants to do it on his watch.”

That said, Dingman notes, there were steps taken to address the city’s collection system issues – particularly the 2012 Revenue Series Bonds funded by the 0.75% sales tax, which contributed in the ballpark of $203 million towards upgrades and improvements.

“Typically you use rates to do that sort of thing,” Dingman said, noting “there was a big push … because we’re a regional hub and a lot of our sales tax comes from nonresidents. The pitch was ‘So here’s a way to help get some of our sewer problems fixed by sharing it with surrounding communities and not putting it all on ratepayers. There were at least two different elections that were done where that was sort of the main drive.”

Still, Geffken acknowledges, it was not enough.

“We were not focusing definitively on the collection system though we should have, and rates should have been going up incrementally over the years for that.”

As Dingman stated, the current consent decree is not the city’s “first rodeo” when it comes to Clean Water Act-mandated orders from the EPA. The city asked for and ultimately got an extension on the first consent decree, mirroring the position where it finds itself now. Geffken and current Board members appear ready to push back. Geffken has already filed a dispute resolution over $120,900 in stipulated penalties and Vice Mayor Kevin Settle said at a recent Board meeting he would prefer to appeal, calling the “Waters of the United States (WOTUS)” rule as enforced by the Obama administration “very broad, and the consent decree is very laced into that.”

At the meeting, Settle told Board members “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,” he said, referring to President Trump’s signing of an executive order on Feb. 28 instructing a review of the regulation.

“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.”

The optimism has merit. When President Trump rolled back previous restrictions with his executive order, he referred to the rule as “one of the worst examples of federal regulation.” Trump also appointed former Oklahoma Attorney General Scott Pruitt to head the EPA. Pruitt has sued the agency multiple times for overreach.

While city officials are hopeful for some relief, there is still uncertainty, and Geffken is ready to take a risk or two, recommending publicly to not go through with any more increases as long as rates are excessive in comparison to MHI, joking for the Board to “be nice” to him when he’s sitting in jail. He will also visit Washington later this month to plead the city’s case to Arkansas’ congressional delegation.

“I really want the public to understand this has been a long-term issue, that it is now having to be addressed, we tried to address it, and our federal counterparts did not pick up the ball all that quickly until we had a new Assistant U.S. Attorney who decided to push this forward,” Geffken said.

He continued: “When the federal government feels they’re not being taken seriously and the municipality or state is not doing what needs to be done, it can lead to a reaction. Did that happen in this case? Yes. But from what I’ve heard in the past, when we would receive an administrative letter from the Environmental Protection Agency, we would respond. And millions of dollars was spent doing work to the system and EPA would not respond. We had a prior Assistant U.S. attorney, who was, I guess, happy with that. But what can happen, is you can get a more aggressive Assistant U.S. attorney that gets put on a case, and things can change very rapidly.”

Roddy, who has extensive experience working with municipalities and their consent decrees, agreed with the assessment, noting “it’s been my observation that the regulators control the scheduling.”

“We’re not calling them and telling them what to do. They’re telling us, and we’re responding to their calendar. If there’s a delay, the delay is not us because we’re not in the driver’s seat,” he said.