More than $50 million in consent decree work approved by Fort Smith Board

The Fort Smith Board of Directors on Tuesday (Nov. 4) approved $50.3 million in sewer system improvements mandated by a federal consent decree. The amount included $5.061 million for engineering and design work.

According to a city memo, the projects approved Tuesday will fix or replace 75,350 linear feet of sanitary and sewer pipe and 247 manholes.

The board was set to vote on $77.152 million in work but tabled a $17.741 million project and a $9.111 million contract because they came in significantly higher than the initial cost estimates.

After decades of failing to maintain the sewer system, officials with the U.S. Environmental Protection Agency and the U.S. Department of Justice filed a consent decree in 2014 with the city of Fort Smith that required certain improvements to the city’s sewer system.

While estimates vary, the consensus estimate is that the total cost could approach $800 million. According to city information, the city spent around $49 million prior to enactment of the consent decree, and spent $87 million on consent decree work between 2015 and 2019. Between 2020 and 2023, the city spent $64.1 million on consent decree work. The total for the work, including prior to 2015, is around $200 million.

To fund the work, Fort Smith voters on May 13 approved by a wide margin a sales tax reallocation plan to provide $360 million over 30 years. Following are the three sources of revenue approved by the voters, including the percentage voting for each measure.

• Reallocation of a 0.75% sales tax first approved by voters in 2022 to pay for consent decree work and to pay bonds, with 0.125% used for the Fort Smith Police Department (64.58%)
• Renewing the 1% street tax but reallocating 0.625% for streets, bridges and drainage work, with the remainder of the tax to fund consent decree work and bonds (64.21%)
• Approval of the authorization to use the tax revenue to issue bonds to pay for the work (66.35%)

Bonds valued at $100.007 million for the voter-approved work were sold Sept. 23, with market demand for the notes better than expected which resulted in a lower interest rate. The lower rate resulted in an estimated $6 million in lower debt payments to the city.

The tabled $17.741 million project, for sub-basin work in a large area that includes the main branch of the Fort Smith Public Library, had an initial engineer estimate of $11.084 million. The tabled $9.111 million project, for work in north Fort Smith, had an initial estimate of $5.191 million.

Former City Director Lavon Morton pointed out the difference in the low bid and the initial estimate and encouraged board members to table the contracts. Through discussions with Morton, the board considered changing how projects are bid and possibly dividing some of the larger projects into two or more contracts.

Morton also noted that the higher engineering and construction costs were from out-of-state firms. He said the size and number of projects may be more than local firms can handle. He suggested that maybe the city try to push around $50 million of work per year as long as that will meet EPA and DOJ requirements.

“By doing all these contracts at one time, maybe we are straining the local capacity. That’s something to consider,” he said.

The board voted 7-0 to table the two projects to discuss at a future study session.