Fort Smith consent decree modification plan vote tabled to Sept. 17

With the goal of getting more financial details and allowing more time for public hearings, the Fort Smith Board of Directors on Tuesday (Sept. 3) tabled a resolution allowing city administration to negotiate with federal agencies to extend a consent decree deadline.

The City of Fort Smith faces a possible $25 million penalty if state and federal officials do not approve a city plan to modify a federal consent decree mandating sewer system improvements. Part of that plan includes pushing the consent decree deadline to 2036.

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 (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.

According to the city, the DOJ on Aug. 8 presented a revised financial plan that adds another five years to the previous five-year extension approved by U.S. District Court Judge P.K. Holmes III. The proposed revised plan from the DOJ includes customer sewer rate increases up to 19% beginning in 2031.

The Fort Smith Board was set to vote on allowing City Administrator Carl Geffken to negotiate a 10-year consent decree extension with the DOJ and EPA, but Director Lavon Morton moved to table the vote, saying the board and city residents should know more about what might be in a new plan, including any sewer rate increases.

“We have one chance, a chance for a 10-year extension. … But we’ve got to make sure we’ve got a financial way to do that that is not overly burdensome to the people who are going to have to pay for it,” Morton said, adding that at the public hearings “we give people a chance to ask questions, and be prepared to respond.”

Director Kevin Settle reiterated his request for top DOJ and EPA officials to visit Fort Smith and see what work the city has accomplished since 2014.

“We did a bunch of work before the consent decree, and we did a bunch after it passed,” Settle said.

Geffken said there is a financial plan, but city staff is also working on ways to free up funds from grants, refinancing and other appropriate revenue sources. He said the federal agencies want certain rate increases built in, but the city is hoping to convince them to approve a revenue target instead of having a hard line on rate increases. The goal, according to Geffken, is to use other revenue sources and keep annual rate increases at or below 3.5%.