Fort Smith Board approves DOJ consent decree, 2015 general fund budget

It was a big dollar, big decision night for the Fort Smith Board of Directors. The Board approved – after a third reading – a roughly $48 million general fund operating budget and accepted the controversial settlement with the Department of Justice that may require an estimated $480 million investment by 2026 to improve the city’s water and sewer system.

The costs – which could result in a tripling of water and sewer bills for all city customers on the Fort Smith system – are part of a possible agreement between the city of Fort Smith and the Department of Justice related to Clean Water Act violations with the city’s water and sewer system. The U.S. Environmental Protection Agency turned the matter over to the DOJ in 2006.

Details of the settlement plan and cost estimates were first discussed publicly at a Dec. 9 special session of the Fort Smith Board.

SETTLEMENT OVERVIEW
Of the $375 million capital costs, 39% ($145 million) is for defect remediation, 17% ($63 million) for capacity remediation, 12% ($45 million) for pumping improvement and 10% ($37 million) for engineering and professional services. Treatment, capacity assessment and current projects are also included in the capital costs.

Of the $104 million in operations and maintenance costs, 26% ($27 million) is estimated for collection system maintenance and repairs, 23% ($24 million) for extra staff and management support, 13% ($14 million) for treatment and pumping maintenance, and 13% ($14 million) for information management. The remainder will cover project management, root removal and pre-treatment work.

While the proposed settlement between the city and the DOJ is complex, the primary purpose of action is to increase capacity to eliminate wet weather overflows and address remedial defects to eliminate dry weather overflows. The time frame outlined in the city's presentation of the proposed consent decree terms extend for 12 years, giving the city time to invest the needed funds to bring the sewer system up to standard.

Under the agreement, the city must begin to monitor overflows in wet and dry weather situations and report all overflows to the Environmental Protection Agency. The assessments must focus on finding the dry weather blockages and intrusions in lines that cause overflows during dry periods. These can include grease blockages and roots that have grown into water lines over periods of years or decades. Testing private lines of residential and commercial users could involve smoke testing.

‘OVERREACH’
City Directors Mike Lorenz and Kevin Settle said the federal terms in the settlement represent federal overreach, with Settle also expressing frustration at having such a short time to review and vote on a broad and detailed deal.

Settle noted that language in the deal penalizes the city even if an overflow does “not reach the waters of the United States.”

“How can the Clean Water Act govern something that happens in my yard? … This is where the federal overreach has hit me so hard,” Settle said.

In part of the lengthy conversation between the Board and city staff and attorneys, Settle said the Board does not have enough data on costs to residents and businesses to vote on the settlement.

“I have had this document for one week, and I’m supposed to approve it and set the course for more than 30 years,” Settle said.

Jerry Canfield, an attorney for the city, said delaying a vote up to 60 days on the settlement would likely result in the Department of Justice filing a lawsuit against the city.

“They have a signed complaint and they will file the complaint,” Canfield said.

As to the question of overreach, Canfield said the process by which the city must acquire permits to operate a water and sewer system gives the EPA and DOJ the “jurisdictional power” to ask the courts to fix the problems.

City Director Keith Lau said the work is mandated by the feds but not necessarily the $480 million cost estimate.

“We are no in any way tagging a number with this agreement,” Lau said, noting that the process still gives the city time “to hammer on those costs” through the process. Lau later added that the Board and city staff “owe it to the citizens to take a fundamental look” at how the city’s water and sewer system operates and how it is managed.

The Board voted 5-2 to approve the settlement, with Lorenz and Settle opposing.

2015 BUDGET, COMPREHENSIVE PLAN
The 2015 general fund budget was approved after the third reading by a 4-3 vote, with City Directors Keith Lau, Mike Lorenz and Kevin Settle opposing the budget.

Lau has vocally opposed the budget because it includes spending $2.14 million more than expected revenues. He has also said the city's reserve fund of 7.5% in the 2015 budget is below stated minimums in the Board's own policy mandates.

Another reason Lau said he would vote against the budget is because it does not address the upcoming insolvency of the police and fire pension contribution fund, which the city's own projections show going broke in 2019.

John Cooley and Galen Hunter, citizen members of Comprehensive Plan Steering Committee, presented an updated Comprehensive Plan to the Board. Hunter asked the Board to appoint a committee to review progress on the plan “so we don’t wind up with a piece of work that is on the shelf."

Director Settle asked for a study session in early 2015 to begin “integrating” an implementation committee into city functions and budgets.

Cooley has said the plan is more of a road map than a hard set of policies and initiatives for the city to undertake.

"It certainly focuses on economic development and natural resources and transportation and infrastructure and all those things that, I think, make perfect sense in our world," Cooley said in an Oct. 17 committee meeting.