FORT SMITH -- City directors are still determining whether to enact water conservation efforts or raise rates for the city's water utilities customers in order to meet future use demands with the Foreign Military Sales mission.
In December, the directors unanimously agreed to indefinitely table a special election for a 0.5% sales and use tax that, if approved, was anticipated to raise more than $14 million annually to support the water utilities. They considered the sales tax election after hearing the results of an independent water rate study during a session from 1898 & Co.
David Naumann, senior project manager with 1898 & Co., said water use is going down nationally as households implement low-flow appliances and conserve water. He said that puts a strain on the Water Department because its revenue is generated by use.
Naumann said customer water bills in Fort Smith average $17 a month, compared to an area or state average of $22 a month. He said possible solutions are to place a sales tax on an upcoming election ballot with the revenue going to the water utilities or to raise rates for all water users inside and outside Fort Smith. The first proposal would mitigate a rate impact for water customers, he said.
Lance McAvoy, director of water utilities, said the sales tax was proposed to last 20 years.
"The reason why this was put forth was to have half of it pay for debt and half of it pay for ongoing needs, pay as you go, because what we're looking at here is to pay for generational projects, especially the 48-inch transmission line, which will get hopefully to the age of our 36-inch and 27-inch transmission lines, which are 100 years old," City Administrator Carl Geffken said.
Josh Buchfink, public relations manager for the city, said the sales tax is being considered for the $160 million needed to complete a 48-inch water line, the $144.6 million project to expand water treatment capacity at Lake Fort Smith, the $35 million in equipment upgrades and repair at the Kelley Highway plant and other projects.
The sales tax collection would not cover the total cost of these projects, so the directors also have discussed issuing bonds or raising water rates.
Naumann's proposal had a Fort Smith water bill of $16.37 in 2023 increasing to $33.27 by 2028.
Geffken said the sales tax money would help keep rates down for water customers, as city visitors also would contribute to that amount.
If the city had raised water rates since 2011 at an average of 5% per year, it wouldn't have to look at having larger increases now, McAvoy said.
Ward 3 Director Lavon Morton proposed tabling the issue to have consulting firm Hawkins-Weir attend a study session, discuss the results of a water availability study it did for the city, answer the board's questions and potentially propose a short-term project that could alleviate some of the city's water issues.
Hawkins-Weir gave its presentation during the board's study session Tuesday, when representatives discussed the city's updated water master plan and the new system-wide hydraulic model they created. The presentation focused on the Chaffee Crossing area because that is where the most development is expected as a result of the Foreign Military Sales project.
Foreign Military Sales is a security assistance program authorized by the Arms Export Control Act. The act allows the U.S. to sell defense equipment, conduct training and provide services to a foreign country when the president deems doing so will strengthen national security and promote world peace.
Ebbing Air National Guard Base was selected last year as the location for the pilot training center. Lt. Col. Drew "Gus" Nash, who is in charge of getting the Fort Smith base training center at Ebbing operational, said the earliest foreign planes and pilots would arrive at the base is this year, and he expects Polish pilots to arrive first. Poland is purchasing 32 F-35 Lightning II aircraft from Lockheed Martin.
Wes Lemonier with Hawkins-Weir said Fort Smith currently has two water treatment facilities -- the Lee Creek and Lake Fort Smith water treatment plants -- which treat a combined 50 million gallons of water per day. He said with the additional demand from Chaffee Crossing, 2024 projections for maximum day demands are at 49.9 million gallons a day, and that if the city started pulling more water from Lee Creek and Lake Fort Smith, they would become depleted.
Lemonier said water treatment plant improvement projects are required to increase the capacity, which would take four to five years to complete.
The projects are scheduled in the Utility Department's capital improvements program projects and are expected to cost $200 million to $300 million, McAvoy said.
"But we were looking at doing it staged, so it would actually be less and we would build as we needed," he said.
McAvoy said the projects would allow Fort Smith to treat 65 million gallons of water per day.
At-large Directors Kevin Settle and Christina Catsavis questioned why the city isn't building more water storage tanks that could hold the treated water and supply the increased demand.
McAvoy said the city has almost 42.5 million gallons worth of water storage.
"If you have too much storage in your system, you're not able to make those tanks turn over," Lemonier said. "So there's a balance that you want to have enough storage, which we feel you do in this scenario, and there's having too much storage to where you're not able to get your tanks to turn over and you can create water quality issues in your system."
Ward 2 Director George Catsavis asked if McAvoy would advise a development moratorium until the city can meet the additional water needs.
McAvoy said he would not advise it due to the Foreign Military Sales program and people needing places to live. Conservation efforts would help buy the city time while they get utility projects done, he said.
George Catsavis asked what the worst case scenario would be if the city doesn't find the money for the capacity improvement projects.
McAvoy said he would hate to become the next Jackson, Miss. In 2022, infrastructure breakdowns caused many people in Jackson, which has a population of 150,000, to go days and weeks without safe running water.
Ward 1 Director Jarred Rego asked that a presentation of conservation options be brought to the board while city administration seeks a long-term solution.
Mayor George McGill said the city needs an honest assessment of what's required to make sure the city continues to grow.
"Then this board will need to have the courage to do what's required," he said. "Some of the decisions are not comfortable to make, but the citizens are counting on us to do what's right for the future and growth of this city."