Fort Smith Board approves highest possible sewer rate for Arkoma

The Fort Smith Board of Directors on Tuesday (June 17) rejected two sewer rate options for the city of Arkoma, which by default sets the rate at $8.75 per ccf. That’s an amount Arkoma Mayor Joshua Johnson has said the city may try to block with legal action.

Fort Smith city staff recommended two rate options as part of a five-year contract set to begin June 22. Johnson has said in recent meetings that his city may seek a court injunction if Fort Smith pushes for a rate Arkoma can’t afford.

A rate of $3.48 per ccf would cover the city’s estimated $3.06 per ccf (hundred cubic feet) cost to treat Arkoma wastewater, and would include a 3.5% sewer rate increase for all sewer customers, and a 10% return on investment in Fort Smith’s utility infrastructure. The second option is a $5.68 per ccf rate. It includes everything in the first option, but includes a $1.93 per ccf peaking surcharge for inflow and infiltration, or the entry of stormwater and groundwater into the sewer system.

Lance McAvoy, Fort Smith director of water utilities, noted in a memo that if neither rate is approved, the rate would automatically set at $8.75 per ccf, which is the residential rate for Fort Smith citizens.

Director Lee Kemp moved to approve the $3.48 option, saying it is “defensible in court” and is recommended by city staff who put a lot of effort behind the calculation. Director Christina Catsavis pushed back against both rates, suggesting Arkoma should pay rates similar to that of Fort Smith residents. Director Kevin Settle agreed with Catsavis.

“In my mind, we should let them (Arkoma) go full rate ($8.75), and then let the courts decide,” Settle said.

Directors George Catsavis, André Good, and Kemp voted for the $3.48 plan, with Directors Christina Catsavis, Neal Martin, and Settle voting against it. Without a majority the vote failed. Director Jarred Rego did not attend Tuesday’s meeting. Only Kemp voted for the $5.68 option.

Johnson said Fort Smith’s cost to provide service to Arkoma is around $1.90 per ccf, disputing the Fort Smith city staff claim of $3.06 per ccf.

“I’m disappointed in today,” Johnson told Talk Business & Politics after the board vote. “Even this far into it there was still misinformation that could have been addressed easily. … Fort Smith, at our current rate, is still not losing money. If we go away, they will lose more money than it is costing them to provide us service.”

When asked about potential court action, Johnson said that will be a decision by the Arkoma council, which meets Thursday.

“But I can’t see any way that that next step is going to be to provide Fort Smith a rate of $8.75,” Johnson said, adding he and the Arkoma city council also will seek legal input.