Water study approved by Fort Smith Board of Directors

The Fort Smith Board of Directors on Tuesday (April 18) approved a resolution allowing city administration to initiate a utility water rate study. A recent action by the Arkansas Legislature gives the city flexibility to respond to the study’s findings.

A water rate study had been discussed for almost a year, but the board had routinely opted to postpone the study because Act 605, passed by the Arkansas Legislature in 2021, would make water rate increases noted in the study required to be implemented immediately.

On April 11, Act 545, an amended version of the law, was signed into law by Gov. Sarah Sanders. Act 545 exempts any city utility provider during the time it is subject to a federal consent decree or judgment for remediation efforts related to the provider’s water system, wastewater system, or water and wastewater systems for the purpose of compliance with federal law.

After years of failing to maintain water and sewer infrastructure to federal standards, the city entered into a federal consent decree with the U.S. 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.

Because of exemption in the new act, Fort Smith is not under the requirements of the law. Therefore, it will not be required by law to enact any rate changes suggested in the rate study. It will be up to the board to decide through passing an ordinance if and when any rate increases will be instituted.

“We went to our state legislature and asked them for help because we deserved an exemption considering we were under a federal consent decree. There are a number of other exemptions that were already in place,” said Director Lavon Morton. “The problem before was that it could lead to a massive water rate increase. If a water study comes back saying the water rate is 30% lower than it should be, it had to be implemented immediately. If over 50%, rates could be increased by 50% year one and the remainder in year two. With our already high sewer rates, needed to be able to pay for the consent decree, and if our study came back in the double digits, that would have amounted to a financial hardship on many of our citizens.”

Utilities Director Lance McAvoy said the city needed a new rate study because of the amount of growth it has seen in customers. He said he has instructed national company Burns & McDonnell, who will conduct the study, to look at what the rates should be for contract municipality customers and residential customers who live outside of the city limits. Many of those customers now pay rates lower than what customers inside the city are paying even though the cost to provide water to them is more. Contract water users pay $1.80 per ccf  while the lowest rate for residential customers is $2.24 per ccf, McAvoy said.

City Director Kevin Settle made a motion to table the resolution for two months so the board could hold a study session on exactly what they wanted in their study. That motion failed by a vote of two for (Settle and Director Neal Martin) to four against. The resolution to conduct the study passed with a vote of six to one with only Settle voting against it.

McAvoy said the study would cost around $50,000 and should be completed in six months, at which time it will be brought to the board in a study session.

In other business, the board unanimously approved a resolution to name the city’s fire station located at 200 N. Fifth St. the Philip P. Christensen Fire Station 1. Chief Phil Christensen joined the Fort Smith Fire Department as a firefighter on May 26, 1992. He served for nearly 31 years, rising through the ranks until promoted to chief in 2016. Christensen died Feb. 11 after a nine-month battle with cancer.

The board suggested the name change in March. Following that, the suggested name was published in the local newspaper, and there was a four week comment/suggestion period regarding the name of the facility. No comments or other names were forwarded by the public, Deputy City Administrator Jeff Dingman said in a memo.

“This is a great way to honor our former chief. Phil will be missed,” Settle said.