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Had the appeals court sided with the city, it would have saved taxpayers 25 to 30% in sewer system expenses, according to Carl E. Geffken, administrator for the city of Fort Smith.
"We estimate that it would have reduced the cost of the consent decree by approximately $140 million, which would have reduced the burden on our residents," Geffken said.
According to the ruling handed down Wednesday by the 8th Circuit U.S. Court of Appeals, the city of Fort Smith must fix the worst sewer lines, those rated with a four or five, within four years after identifying them.
Geffken was not certain exactly how much of the city’s sewer system has been analyzed for defects but said it’s currently more than 50% and not all of the potential problems have been identified.
City leaders were hoping for a favorable ruling from the court that would allow the city to focus first on repairs that needed the most attention.
"For example, a round pipe, it can become oval, doesn't mean that its structure is compromised it's just oval, that's rated a four," Geffken said.
Fort Smith had the oldest administrative order in the country. According to court records filed by the federal government, violations to the Clean Water Act spanned three decades, beginning in 1988. Between 1988 and 2005, the EPA issued 14 administrative orders to the city for illegal sanitary sewer overflows, according to the documents.
The city entered into a consent decree with the EPA and U.S. Department of Justice in 2015 mandating required repairs to the city sewer system. Since then, estimates to complete the work have skyrocketed to approximately $600 million with a deadline for consent decree-related repairs to be complete by 2032.
"That's nine more years in which we need to spend over $600 million, plus all the other work we need to do. It's going to be very difficult for the city to do that," Geffken said.
Fort Smith residents experienced a 167% increase in their sewer bills from 2015 to 2017.
"That's (funds from rate increase) going to support the system and pay off the debt that we borrowed. We borrowed $180 million in 2018. That refinanced existing debt at a lower interest rate and provided capital to do the work that we're still using and will hopefully be spent this year on work now that COVID-19 has abated," Geffken said.
In May, Fort Smith voters approved renewing and repurposing a sales and use tax for eight years, dedicated to helping fund consent decree work.
According to Ordinance 20-22, current sewer rates are frozen in place for the next three years. The ordinance states rate increases will be frozen in place at 3.5% each year for the remaining four years of the sales tax duration, as long as the city meets its requirements to bondholders and unless the court ordered to raise rates.
Geffken told 40/29 News the sales and use tax is estimated to generate $16.5 million per year to help fund consent decree-related work. The city serves approximately 37,000 water and sewer customers, he said.
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