Fort Smith Directors discuss challenges, opportunities for 2019

Looking toward what the Fort Smith Board of Directors hopes to accomplish in 2019, directors frequently mentioned two items — the federal consent decree for years-long violations of the Clean Water Act and economic growth.

Following the Tuesday (Jan. 22) regular meeting of the board, directors took a moment to talk with Talk Business and Politics about the issues facing them in the coming year.

“I think one of our biggest challenges (as the board) is the consent decree. How we maneuver through that and the renegotiations that are ongoing and we get through that this year is the biggest thing the board needs to focus on because it impacts every citizen, every business, everybody in our city,” said Kevin Settle, vice mayor and At-Large Position 6 director.

The city entered into a federal consent decree with the U.S. Department of Justice in late 2014 without fighting it in court. The consent decree requires the city to make an estimated $480 million worth of sewer upgrades over the course of 12 years. On Aug. 10 city officials met with EPA officials in Dallas to discuss city-requested modifications to the 2015-enacted consent decree.

Key modifications requested by the city included:
• Cap sewer rates at no higher than 1.9% of median household income (MHI) for the remaining term of the decree. The city argues it is a “significant financial commitment that would generate another $100-$156 million between 2019 and 2026 for additional consent decree-mandated projects and activities.”

• End the Consent Decree in 2026, then transfer any further regulatory oversight to the Arkansas Department of Environmental Quality (ADEQ).

• Delay hydraulic modeling, capacity assessment, and capacity remediation until the sewers have been cleaned. Currently, all four actions are required to be undertaken concurrently.

• Stipulated penalties would only be assessed if there is an overflow due to the City’s negligence and not for overflows that are beyond the city’s control. “Ratepayers’ funds should go to pay for fixes, not fines,” the city release stated.

‘A SEVERE BURDEN’
“Our residents have seen their water and sewer bills rise 167% since 2015,” City Administrator Carl Geffken said in a statement issued following the meeting. “That’s about 2% of median household income, which EPA’s own affordability guidelines say is the maximum that can be expected of ratepayers. Based on the City’s proposals, $200 to $256 million will be spent over the course of the Consent Decree, 2015 to 2026. The City has spent $100 million from 2015 to date and will spend $100 to $156 million over the next eight years. This is the lion’s share of the work completed by the Consent Decree. Whatever work remains will be more localized sewer improvements which can be more than adequately addressed with ADEQ.”

The city’s news release also expressed hope “the Trump Administration will recognize the significant investments the City has made to address the major issues that triggered the Consent Decree and that the Administration will work with us to ensure that sewer rates remain affordable over the remaining term of the Consent Decree. Finally, consistent with the President’s direction to implement cooperative federalism, we hope that EPA will agree to pass the modest remaining program oversight to ADEQ following our completion of Consent Decree requirements through 2026.”

Ward 4 Director George Catsavis said the consent decree is the biggest challenge facing the board this year.

“The city has been negotiating with EPA for more favorable terms such as extending the time to comply with the consent decree from 12 years to 20 years. As of now the sewer rates have exceeded two and a half times the average mean income of Fort Smith residents, which is unacceptable. We need to lower these rates that have placed a severe burden on the people,” Catsavis said.

Settle believes the consent decree is costing Fort Smith residents money for a federal mandate that may no longer be in effect.

“There are issues of streets, drainage and police, fire and day-to-day how we improve the lives of our citizens, but everything we are hearing today is based on the consent decree and our water and sewer rates are effecting everyday citizens,” Settle said.

Ward 3 Director Mike Lorenz said the consent decree had to be a primary responsibility of the board, noting that there is no way it can go away, so the goal needs to be to a minimum of an impact  as possible on the residents of Fort Smith.

“We need to be fiscally responsible and efficient in everything we do with that,” Lorenz said.

Ward 1 Director Keith Lau also marked completion or continuation of the consent decree as a major concern for the board along with implementation of the new billing system through the water department and the installation of the new meters, along with continuing construction.

ECONOMIC DEVELOPMENT
“We also have to address the loss of revenue from the sale of Sparks (Regional Medical Center) to Baptist (Health) and their going to nonprofit status. Part of that will be any annexation talks,” Lau said. “And really just continuing to implement all the programs we have implemented in the past four or five years.”

Those continuing projects, Lorenz, noted include the water transmission line project from Lake Fort Smith.

“It’s highly necessary, highly important to make sure we do that. We have plenty of water. We need to make sure we can get it here reliably,” Lorenz said.

Another important topic for the city is economic development, noted Neal Martin, At-Large Position 7 director, Robyn Dawson, At-Large Position 5 director, and Catsavis.

“We have got to make sure we are providing a climate of economic development. That is one of the biggest things I’m looking for, the ways that the board can make that happen,” Martin said. “I want to put together an economic development fund that the city can use to entice business to come here. That’s not a one year thing, that’s a four, five, six, seven, eight year thing. But I want to make sure we are being as efficient as we can with our funds so we can have some flexibility to do that. We always want to be able to attract businesses and keep businesses here.”

Catsavis said part of that is to create a business-friendly environment in Fort Smith.

“It should not be a challenge to open a business. The board needs to reach out to businesses to get their thoughts as to how make it easier and cost effective to open a business. The issue should be let’s do what we can to make your business a successful venture,” he said.

TRANSPARENCY, EFFICIENCY
The city and the board also needs to make better communication a priority, directors said.

“The biggest issue is to realize how we can communicate, how we can talk openly in meetings. There are so many large issues that we haven’t discussed,” said Ward 2 Director Andre Good, noting water rate increases. “We’ve got to be able to have the conversations. … We need to make sure that we are being transparent and that we are being very honest. That’s board level and management level. I think it’s very important for board members to be in contact with our staff so we can guarantee that we are hearing from all aspects of the organization. Again, that all is to be transparent and efficient.”

Catsavis echoed the need for efficiency, noting that the city should not raise taxes or utility rates.

“The people have had enough higher everything the last few years. It has hurt many financially. It’s time for the board to have a reassessment of all city functions and spending and expenses to ensure that we are spending the tax payers’ money efficiently,” Catsavis said.

Other issues raised were finding a way to effectively deal with the city’s homeless and panhandling issues and to listen to the residents and help them with their needs.

“There are so many positive things going on in Fort Smith, and I want to facilitate them as best I can,” Dawson said. “My goal is to use my experience to facilitate growth and to use the resources I can and the facts I can learn to help meet whatever needs people bring to me.”

The next regular meeting of the board will be 6 p.m., Feb. 5 at the Fort Smith Public School Service Center, Building B, 3205 Jenny Lind.