Fort Smith loses appeal on consent decree relief request

An 8th Circuit Court of Appeals ruling means the city of Fort Smith will have to repair all grade 4 and 5 lines in the city’s sewer system, which could more immediately cost the city $100 million to $150 million in federal consent decree work.

The city asked the court to resolve a dispute concerning implementation of a 2015 Consent Decree between the city, the State of Arkansas and the U.S. in the Clean Water Act suit. The federal Appeals Court on Wednesday (Sept. 14) confirmed a previous decision by U.S. District Court Judge P.K. Holmes III.

After years of failing to maintain water and sewer infrastructure to federal standards, the city entered into a federal consent decree with the United States Environmental Protection Agency (EPA) and U.S. Department of Justice in late 2014. The consent decree required the city to make an estimated $480 million worth of sewer upgrades over the course of 12 years.Over the past six years, the city has spent approximately $127 million in capital costs for required improvements. That does not include work done prior to the consent decree, work still needed, or the operation and maintenance program the city has implemented that will outlive the consent decree, said Fort Smith Director of Utilities Lance McAvoy.

The city spent about $200 million on storage tanks and equalization basins to reduce wet weather sanitary sewer overflows, which are the basis for the consent decree requirements. If the city has to do what is demanded of the consent decree within the timeframe set to be in full compliance, it will cost the city well over $600 million in capital cost because of additional areas rated a four or five that have to be fixed within four years of detection and inflation, McAvoy has said.

On May 7, 2020, the United States Environmental Protection Agency (EPA) and the Arkansas Department of Environmental Quality (ADEQ) agreed that the city proved that the sewer improvement program will be “inordinately expensive, accordingly, qualified for an additional five years of implementation time.” The city received an additional five years added to the 12 in the order to implement changes. Because almost six years have passed, that means the city has 11 years to complete the improvements, said Paul Calamita, with Richmond, Va.-based AquaLaw, the firm hired by the city to help with legal relief.

Along with the five year extension, the EPA and ADEQ agreed to provide additional flexibility with certain interim program deadlines that will allow Fort Smith the ability to stretch out expensive system improvements over the whole of the remaining program implementation schedule, according to the update to the decree provided by the city in 2020.

An attempt by the city to remove the category four and five lines, which according to McAvoy may not need to be repaired for many years, was blocked by Judge Holmes in 2021. At the time Calamita said the decision was appealable because of legal issues. That appeal was lost Tuesday.

“(U)nder the Consent Decree, the city is obligated to remediate portions of its sewer system; the dispute here concerns the time frame for remediating certain serious structural defects – must they be repaired within four years of discovery or are they subject to an open-ended monitoring and maintenance scheme; the District Court did not err in determining the city was obligated to remedy these classes of defects within four years of their discovery,” noted the ruling.

A grade 5 pipe segment is described as one that “has failed or will likely fail within the next five years. Pipe segment requires immediate attention.” A grade 5 manhole is described as one where “failure has already occurred or is likely to occur.” A grade 4 pipe segment is described as one that “has severe defects with the risk of failure within the next five to ten years.” A grade 4 manhole is described as having cracks, deterioration or visible deformities.” By comparison, grade 1, 2, and 3 pipe segments and manholes have less severe defects.

The court’s ruling stated that although the appendix to the consent decree favored the city’s argument that it could monitor the four and five defects rather than complete their replacements within four calendar years, the body of the consent decree stated they had to be replaced in the four-year timeline.

“Another relevant provision of the Consent Decree instructs that “[a]ny conflict between the language in the body of the Consent Decree and the language in an appendix should be resolved in favor of the language in the body of the Decree,’” the ruling states.

City Director Lavon Morton said the city now has the final ruling and needs to get busy.

“The time has come to move as fast as we can to get the work on the consent decree completed,” Morton said.

City Administrator Carl Geffken said Wednesday the city has been completing its capital plans that include the work and budget necessary to address pipes that have been rated a 4 or 5, so there is no budget impact from the ruling at this time.

“Although we are disappointed with the decision, we will continue to do our best to comply with the U.S. Clean Water Act, as I have said consistently since 2016. The approval of the 5/8th percent sales tax and the Board of Directors’ approval of a sales tax committee to review spending shows the City’s commitment to transparency and to achieving the requirements of the Consent Decree.  As we work on the consent decree, the true cost of the work has increased, and we would like to address sanitary system overflows in a direct manner and in a way that does not overly burden our residents. We have had discussions with the US DOJ, US EPA, ADEQ, and the AG that have been productive and we are looking forward to future discussions.”

The city is still in the process of negotiations that might grant some reprieve due to the COVID-19 pandemic and the historic flooding of the Arkansas River in May 2019 that caused significant damage to some of the city’s sewer system, Morton said. Those negotiations may allow the city more time to complete repairs, he said.