The Fort Smith Board of Directors on Tuesday (Sept. 6) voted 7-0 to approve a settlement with the city of Barling in which that city will pay $325,000 to cover water contract obligations dating back to 2002. Fort Smith initially alleged that Barling owed $1.1 million.
The contract between the two cities set a minimum purchase of 587,000 gallons of water a day. If the city of Barling did not acquire that much per day, it would be charged a “true up” to pay the difference between what was purchased and the minimum requirement. The contract required the city of Fort Smith to invoice Barling in a separate invoice for the true up charge.
In 2017 when the city of Fort Smith was looking into grant opportunities for the Chaffee Crossing area of Fort Smith, it was discovered because of the contract that Barling owed Fort Smith a little over $1.1 million for water, Fort Smith City Administrator Carl Geffken said in November 2018.
Matt Ketcham, an attorney with Caddell Reynolds in Fort Smith and the attorney for the city of Barling, argued that the city of Fort Smith could only go back five years. After negotiations failed, the city of Fort Smith filed a lawsuit in November 2019 seeking $865,900 from Barling. After rounds of court filings, the city of Fort Smith sought summary judgment for $909,730. In October 2020, Sebastian County Circuit Judge James Cox denied the city’s request for summary judgment.
What followed were more negotiations, with both sides eventually settling on the $325,000 payment. Ketcham said Barling has paid all water bills sent by the city of Fort Smith for regular monthly usage.
“For every bill that was received from the city of Fort Smith by the city of Barling, we paid them timely since 2002. The problem is, we did not receive notice for underpayment, or any invoices for underpayment, until 2017,” Ketcham told Talk Business & Politics.
The city of Barling previously approved the settlement agreement.