Fort Smith Board approves path to negotiate consent decree modification

The Fort Smith Board of Directors voted unanimously Tuesday (Sept. 17) to allow city administration to negotiate for better terms under what has been a costly federal consent decree mandating more than $600 million in sewer system improvements.

Voting followed a lengthy discussion with a focus on keeping sewer rate increases as low as possible. An amendment to the resolution also called for a 60-day period that includes at least four public hearings to review a modified consent decree.

Tuesday’s vote was not to approve whatever is negotiated, but was simply a vote allowing City Administrator Carl Geffken to lead a negotiation effort with the U.S. Department of Justice (DOJ) and the U.S. Environmental Protection Agency (EPA) to modify the consent decree. The resolution also called for at least one director to be part of the negotiations.

CONSENT DECREE HISTORY
After decades of failing to maintain water and sewer infrastructure to federal standards, the city entered into a federal consent decree with the EPA and DOJ in late 2014. The consent decree, which began in January 2015, required the city to make an estimated $480 million worth of sewer upgrades in 12 years.

In May 2022, Fort Smith voters passed a 0.75% sales tax from Jan. 1, 2023, to Dec. 31, 2030, with 83.3% of the revenue going to federal consent decree work on the city’s water and sewer system, and 16.7% directed to the police department. Funding for consent decree work to date also has come in part from water and sewer bill increases, which are up 167% since 2015.

The DOJ and EPA provided a draft modification to the city for review and mark-up, Geffken said. One of the items required by federal agencies is a financial plan and assurance by the city to fund consent decree projects. The agencies provided several financial models performed by their consultant which included various sewer rate increases to fund the consent decree projects.

UNIFIED PRESENCE
The challenge for Fort Smith officials is to make changes to a modified plan proposed by the DOJ and EPA that includes significant sewer rate increases over a short period of time. For example, the draft agreement calls for 156% rate increases over the next 12 years of the consent decree period. The city is responding with revenues from other sources that would result in 51% rate increases over the 12 years.

Fort Smith Director Kevin Settle expressed frustration with the federal agencies, saying it was “rushed down our throats” in 2014, and has forced the Board to push back against large rate increases since 2015. Director Christina Catsavis expressed frustration with Paul Calamita, the attorney hired by the city to help negotiate with the DOJ and EPA, saying he is not adequately explaining to federal officials all that the city has done since 2014 to meet mandates under the consent decree.

Director Lavon Morton said he is hopeful a resolution that best benefits the city and its residents will be made. He said this is the first time the federal agencies approached the city with a willingness to consider more time. Morton said he believes the DOJ is looking for a “serious indication” that the city will find the money “and do some serious work.”

Russ Bragg, a board candidate for the seat Morton holds but is not seeking reelection, pushed the board for a unanimous vote that would send a message to the federal agencies that the city is unified in its pursuit of a modified decree.

“But the challenge tonight is we need to be unified in our presence. … They already know what we’re bringing to the negotiation table, but a unified presence, a 7-0 vote will tell them we’re serious, and hopefully that seriousness will get us those extra two years we really need on the tail end of this,” Bragg said.

As of Tuesday night, it was not known when or where negotiations between the city and federal agencies would happen.