Highlights of the Fort Smith Board of Directors Meeting 11/12/24

At the Fort Smith Board of Directors meeting held 11-12-24, the Board heard the annual update from Main Street Fort Smith (formerly named 64.6 Downtown) the non-profit organization with whom the city contracts for downtown development and participation in the Main Street Arkansas program. The report was presented by the organization’s new director, Amanda Hager. Some highlights of the report included that this past year the Levitt Amp Concert series of 10 free outdoor concerts saw 2000 attendees, downtown ambassadors received customer service training, a walking tour for participants in The American Institute of Architects conference was held, and the Ghouls on Garrison trick or treating event was successful and featured over 40 businesses participating. Events that were held by other partner organizations in the downtown area including Peacemaker, Steel Horse Rally, and the Food Truck Festival were all very successful. Some things that are planned for next year is that funding has already been secured for another series of Levitt Amp Concerts, planning is underway and grant funding and CBID funding has been secured for installation of lighting and a sidewalk mural running between Rogers and Garrison next to the State Building, improvements are to be made to the downtown banner project including adding 30 additional banner poles, a holiday cocoa crawl and tree lighting event is to be held, a database of available downtown spaces is to be made, the Downtown Guide is to be upgraded via a partnership with the River Valley Democrat Gazette that will also add a digital version in addition to the print edition, and there will be a collaboration with the Parks department for beautifying downtown landscaping. The Invest Fort Smith Summit to be held 11-13-24 has 87 participants registered.

Director Rego asked if other cities with vibrant downtowns have a similar organization to Main Street Fort Smith. Hagar said that they often do, that there are 1200 official Main Street America communities and that many other cities have other similar organizations.

Director Good praised the Levitt Amp series and said that the concerts are well-attended but that he’d like to see them be better attended. He expressed excitement about the lighting project. He asked if there is anything that Main Street Fort Smith or the City could do about filling vacant spaces in downtown. Deputy Administrator Dingman said that the City is not taking any City action on them currently. Hager said that that is something she “would like to look more into next year.” She mentioned that some cities have ordinances that allow for an extra tax to be charged if buildings in certain neighborhoods are allowed to sit empty for long. She also mentioned that some places have incentive programs that offer promotion for people to fill vacancies or incentives that roll construction costs into the rent. Director Good suggested looking into grants that might enable using vacant storefronts for art or advertising.

Director Good also mentioned the impact of homelessness downtown. Director Martin said that the recent Grants Pass Supreme Court decision might play a role in offering an “opportunity to do something to alleviate that.” He said that homelessness needs to be addressed for a successful downtown and the “overall downtown walkability and livability” to improve.

Director Morton asked if there were other similar cities with successful downtown rejuvenation that Fort Smith could look to. Hager said that she has already talked to Springfield,Missouri, and Argenta in North Little Rock. She mentioned especially finding Springfield’s collaboration with their equivalents of the Chamber of Commerce and the CBID compelling. She said that the other cities she’s talked to dealt with their downtown homelessness issues with strengthened sidewalk ordinances, moving homeless services facilities to the fringe of downtown, and focus on ramping up transportation services.

Director George Catsavis asked about the free parking downtown. Hager said “People love it.” Director George Catsavis said the “meters need to go.” He said of the potential for taxing of empty buildings “I will never vote for that.” Director Christina Catsavis agreed that she would not vote for that either.

The Board agreed to place the proposed 2025 calendar on the next meeting agenda. There was no further discussion on that issue.

The Board heard and discussed a presentation from Jim Johnston with Trane Technologies regarding a project to study the loss of billed water through meter inaccuracies and determine the financial feasibility of large scale water meter replacement with Advanced Meter Infrastructure (AMI) meters. Utilities Director McAvoy said the AMI system is “where we need to go to modernize the entire department.” The AMI system would allow for users to monitor their water usage via an app throughout the day updated every 15-30 minutes and would allow them to see water leaks on the customer side and address the problem ASAP and to receive notifications for unusually high usage that might indicate something running or a leak. Johnston said that the study, which would cost $34,000 if the City did not opt to install the AMI system and would not be charged for if the City opted to install the AMI system, would start with an assessment with testing of 400-600 meters testing accuracy, efficiency, and serviceability. Then it would move on to a feasibility study of financial factors like return on investment, payback rates, potential recovery of unclaimed revenue that would be delivered to the Board. He said that 25-40 percent inaccuracy is a typical finding in cities that they’ve worked in previously. He said that if the potential revenue recapture is less than 12-15% it would not be advisable to move forward with installation of the system. If the Board were to approve the installation of the system, it would typically be funded via a revenue bond. Johnston said that 60% of cities that have the financial means have converted to AMI systems.

Director Settle asked about the lifespan of the AMI meters. Johnston answered 20-25 years. Director Settle asked about the accuracy of the AMI meters. Johnston answered within 1% rate of inaccuracy. Director Settle asked how they were connected to the cloud system. Johnston answered that they are connected through a combination of cellular and wifi infrastructure. The wifi infrastructure would involve needing to add wifi repeaters throughout the city dedicated to the meters only. He clarified that they would not be a city-wide wifi system like could be used by consumers for internet access. They would be just for water meters. Director Settle expressed concerns about the cost of the meters at $1000 a piece plus the cost of the wifi improvements. Director Settle questioned why the 2/3 of City water meters replaced 10-15 years ago were not replaced with AMI meters at that time. Johnston said that the tech that was chosen with the drive-by reading capability was still the go-to tech at that time. Director Settle suggested waiting to upgrade until Starlink remote reading could be made available.

Director Martin asked the cost for similar installations. Johnston said that with the lowest tech the entire cost, installed, including the wifi upgrades, is typically $1100-1500 per meter, but depends. Director Martin asked if the AMI would enable shutting water on and off remotely. Johnston answered that it would, both for pressure issues and for non-payment and that a truck would no longer need to be dispatched to disconnect or reconnect water service. McAvoy expressed concerns about turning on water remotely when no one is home because there might be a pipe broken or a faucet left on that would cause high water usage that residents are charged for and unhappy about.

Director Morton pointed out that at $1100 for 38,000 meters the total cost would be $42 million. Director Morton asked about the largest city Johnston has done was with the wifi repeaters. Johnston answered that it was Lexington, Kentucky, that required 8 wifi repeaters.

Director Martin expressed concerns about the recaptured revenue not offsetting the cost of the installation of the system and about the cost to just do the study.

Director George Catsavis said “I’m skeptical.” He mentioned that when the old meters were replaced with the new drive-by reading meters that there was no revenue increase seen as a result and that replacing those cost $10 million. McAvoy said that the previous utilities leadership chose to prioritize installing the meters in places where newer meters were replaced instead of starting with the oldest, so they didn’t show the expected increase in revenue because they were not installed where the most inaccuracy was occurring. Director George Catsavis also mentioned that he had not realized that the life expectancy on those drive-by style meters was going to cause them to also need replaced again so soon.

Director Christina Catsavis asked why the Utilities Department is not testing the meters to conduct the study themselves. McAvoy said that the testing bench is already busy testing the meters about to go into the ground or where there have been customer requests to inspect a meter and that staff is working as fast as they can on that. He said that the outside study also removes experimental bias.

Director Settle expressed concerns about cybersecurity and hackers being able to turn off the meters. McAvoy said that they would have to have a passcode and account number and that for added security the maker chosen for the meters, Badger, is a US maker. Director Settle expressed concerns about a rate increase being needed to pay for the meters.

Director Martin asked if the majority of the unaccounted for water in our water system is lost at the meter. McAvoy said that a “large portion” is but that there is likely significant loss in the 27 inch transmission line. Director Martin said that he doesn’t want to spend on the project if the revenue recovery “is not great.” McAvoy mentioned that the ability to make better notifications available about water usage might make it so that the Board could reconsider their leak write-off policy.

Director Rego asked if the need to replace meters is always regularly ongoing. McAvoy confirmed that it is. Director Rego pointed out that the $34,000 study would cost 4% of one month of residential water revenue. He expressed his desire to move forward with the study.

Director Morton agreed with Director Rego. He asked about testing and potentially replacing the meters going to other cities that use Fort Smith water including Barling and Van Buren. McAvoy said that the installation would include replacement of the master meters going to those outside cities, like Van Buren has 3 or 4 and Barling has 3. It would not involve installing new meters for every household in those cities. McAvoy said that the AMI system would allow Fort Smith to see if those outside cities are using more than their maximum contracted hourly usage and should be being charged a surcharge for that. Fort Smith cannot see that up-to-the-hour data currently. Morton said that with the commercial, industrial, and outside cities meters being replaced that he thought the numbers might work to make replacement beneficial, but not with just residential replacement. McAvoy also mentioned meter under-reading also decreases sewer revenue needed to fund the consent decree projects because the sewer usage is billed for the actual water use rate in the winter and the winter average water use rate in the summer, so under-billing water also under-bills sewer at the same time.

Director Christina Catsavis suggested focusing on outside users and commercial industrial users instead of Fort Smith residential residents that only make up 30% of water use. McAvoy said that the Utilities Department does not have a test bench that can accomodate testing for the meters used for the commercial and industrial and outside cities accounts. Director Christina Catsavis said the she doesn’t “want to move forward with anything for Fort Smith residential right now.”

Director Settle suggested a pilot program where in all 13 cities that Fort Smith supplies water new AMI meters would be installed next to the old existing meters and both are allowed to run and are compared with each other. McAvoy said that the meter vaults won’t hold two meters and that the vaults cost $40,000 a piece.

Director Christina Catsavis asked why the meter study was not done before the recent rate increases. Director Morton said that the Board was “under the gun” with the failed bond covenants for 2023 and likely failures for 2024. He mentioned that there are currently 12,000-14,000 20-40 year old meters still in the ground.

Director Good mentioned that replacement with drive-by meters only replaced 60% of the meters and that 40% of the worst meters are yet to be done.

Director Martin proposed that no increases be made to the water rates this year or next year until the AMI meter replacement study is finished. While the cost of the study is under the threshold that allows for Administrator Geffken to authorize the study on his own, the Board voted informally in favor of Geffken moving forward with the study with the stipulation that there will be no further water increases this year or next year until the study is complete. Director Morton, Director Good, Director George Catsavis, and Director Rego voted in favor of the study and Director Martin, Director Settle, and Director Christina Catsavis voted against the study.

The Board discussed potential changes to the irrigation water rates. Scenario #1 that was discussed, the one recommended by Administration, is to eliminate tier 4 from the rate structure and also charge irrigation at the tier 3 rate of $5.26 per CCF. The revenue from the recent rate increases would drop by 4% with that plan. Scenario #2 discussed was changing to a flat rate of $4.18 per CCF. Scenario #3 discussed was to keep rates and tiers as they currently are for now and adjust the rates in the future with the lower tier rates being raised to narrow the difference between tiers.

With the recent increases, 63.5% of residential accounts (those using up to 7 CCF) saw an increase of $10 or less on their bills for water. 27.7% (those using 8-20 CCF) saw an increase of $10-$50. 8.8% saw an increase greater than $50. 0.22% saw an increase greater than $500.

36.9% of irrigation accounts saw an increase of $10 or less. 9.1% saw an increase of $10-$50. 54% saw an increase greater than $50. 8.3% saw an increase greater than $500.

The Board discussed the comparison of rates and rate structures with Arkansas cities including Barling, Conway, Greenwood, Van Buren, Central Arkansas Water, Rogers, Fayetteville, Bentonville, and Springdale.

Dave Nauman with Burns & McDonald that also did the rate study that was used for the recent rate increases spoke. He mentioned that a flat rate system is most commonly used by smaller cities and an inclining block system is (like Fort Smith currently uses) is more commonly used in larger cities. He said that a system with 3 tiers is the most common for comparable Arkansas cities.

Director Morton noted that Fort Smith water rates are higher than some cities and that the irrigation rate is higher than Fayetteville and asked why. Nauman said that factors including the age of the system, how it has been maintained over time, growth, fixed fees, and funding over time (cash versus borrowing) all affect costs to produce and deliver water. He said that the cost to produce and deliver water in Fort Smith averages $4.14 per CCF and that the average revenue per CCF in Fort Smith is $4.18. He said the 2024 increases were designed to produce a 50% revenue increase and that all three of the proposed adjustments attempt to be “relatively neutral” as far as impact to that revenue increase is concerned with them all ranging from 2-4% drops in increased revenue.

Director Christina Catsavis mentioned that the median income in Bentonville in $99,000 per year and that in Fort Smith it is $50,000 per year.

Director Morton asked about the effect of Scenario #1 on HOAs and POAs. Nauman clarified that they would also drop from $6.76 to $5.26 per CCF at the tier 3 rate. Director Morton asked how apartment complexes that are all on one meter would be charged. McAvoy answered that they would be charged at the commercial rate of $3.50 per CCF.

Director Rego noted that Fort Smith is “right there in the middle” for irrigation rates compared with the comparable Arkansas cities.

Geffken said that Scenario #1 has the smallest impact on the most citizens and keeps the rate structure in place.

Director Christina Catsavis said “I thought we were looking to not subsidize other tiers.”

Director Morton mentioned that irrigation places strain on the system in the summer. He said that the recent rate increases were designed to be “as fair as we can be, not increasing the lower tiers more than we had to.” He said that the “did not envision 80,000 gallons per month” users. He said that he has had no critical comments from lower tier customers or commercial or industrial customers about the recent increases but that he “didn’t look deep enough into irrigation.” He said of irrigation rates “We’re too high.” He said that water rates are “extraordinarily complex.” He expressed support for Scenario #1. He mentioned that it would also set the city up for flat percentage increases in the future.

Director Rego thanked the public for their feedback regarding irrigation rates. He expressed support for the drop in irrigation rates in Scenario #1.

Director Martin said that rate changes are a “case of revenue.” He expressed doubt that at 2% of users and 3% of revenue that irrigation changes would have a big impact on revenues. He suggested more concentration on industrial accounts instead of residential ones. McAvoy explained that industrial accounts don’t create peaking cost, when more resources are used. Their usage is more steady. So it costs less to provide industrial water than residential. Nauman agreed that residential drives peak cost and is more expensive to provide that industrial or commercial.

Director Christina Catsavis advocated for raising rates on industrial, commercial, and outside users so that it is “more equitable for everyone” instead of “Fort Smith residential subsidizing everyone else.” She pointed out that her intention with the recent rate increases was to put the City in a position where they could legally also raise rates on outside, commercial, and industrial users. She reminded that the Project Concern income threshold was raised to 200% of the federal poverty line to allow for more people to be eligible for the City’s utility discount program. She advocated for raising rates on the lower tiers so that all of the water would be selling at least a break-even point.

Director Settle requested information for the Board regarding winter and summer water cost information.

The Board voted to put Scenario #1 on the agenda for a vote at the next meeting. If approved at that meeting, the change would go into effect December 1st.

Because of the already long length of the meeting, the Board opted to postpone the discussion of the overturn of Chevron Deference in the Loper Bright Enterprises v. Raimondo decision. This decision overturned the previous practice that allowed federal agencies including the EPA to interpret ambiguous law including the Clean Water Act. This change could potentially impact the consent decree that Fort Smith is under. It will be added to the next study session meeting agenda. Even with that item cut from the agenda, the meeting still ran just over 4 hours long.

The Board still discussed the Grants Pass, Oregon decision in which the court upheld Grants Pass local ordinances regarding homeless camping on public property. The Board was presented with and discussed two potential ordinances that could be enacted in Fort Smith regarding homelessness. One of the ordinances presented was one identical to the one from Grants Pass except with “Fort Smith” swapped in when appropriate. The other ordinance is one that would be substantially similar to Grant Pass’s ordinance but also incorporated stronger language from ordinances from other cities. The stronger ordinance includes language to prohibit camping on vacant private lands in addition to public property and also in addition to the tents and awnings mentioned in the Grants Pass version mentioned huts and lean-tos. Gard mentioned encountering many lean-tos built from wood, pallets, tarps, and other scavenged materials in Fort Smith. The stronger version also mentions prohibiting sleeping and sitting and laying down on sidewalks, alleys, and doorways, prohibits obstructing pedestrian walkways, and says that people who are in violation of the ordinance can be removed from the premises immediately.

Neighborhood Services Director Shawn Gard mentioned that the only ordinance in place in Fort Smith currently is one limited to addressing open storage that includes prohibiting tents and camping accessories outside. Gard mentioned that there are homeless encampments across the city. He said when Neighborhood Services partnered with the railroads that owned the property and cleared the riverfront camp that 80-100 homeless people were affected by that. He said that when homeless camps are found that Neighborhood Services is “quick to motivate on these.” He said that cleanup of those sites often includes soiled tents, bedding, clothes, garbage, feces, and drug syringes. He said that the City needs something “more forceful” to address the issue “head-on.” Gard said that there would need to be discussion on enforcement. Currently Neighborhood Services only deals with the debris involved, but the “human factor” needs discussed. He mentioned some people being reluctant to visit downtown because of the homelessness issue. He called the proposed ordinances “a way to turn the tide.”

Director Morton expressed support for the stronger version including better definitions than the Grants Pass version. He suggested having separate ordinances for public property and for private property. He said that with having it as a single ordinance, the parts about vacant private land that might be more subject to legal challenges might jeopardize the entire document. He mentioned Fayetteville’s ordinance that requires people who allow camping on their private property to get a permit that costs money and has to be renewed and to take responsibility for the clean up. He said that railroads might object to that, though. He mentioned that while Fort Smith has not had the same issue that caused Fayetteville to enact that ordinance where private property owners were willfully allowing homeless camping in their neighborhood there are organizations in Fort Smith that have allowed some laying on the ground outside. He said the idea would be to make it “very difficult to meet the requirements” to allow camping and to make property owners cover the cost of clean up.

Director Morton said that enforcing the proposed homelessness ordinance would require “daily sweeps” downtown and that Neighborhood Services does not have the staff to do that and would need the Police to be involved. Director Martin agreed about the need for police for enforcement. He also mentioned that panhandling could be reduced by the “sitting” prohibition in the stronger ordinance. Gard mentioned that the stronger ordinance also includes exceptions to allow temporary sitting or lying down due to a medical emergency.

Director Rego requested that the Police Department be involved in the discussions to offer what is realistic from an enforcement standpoint before an ordinance is voted on. He said that a “filter of compassion has to be applied to the homeless population.” He said that 1/3 of the homeless are people often including women and children who have fallen on hard times or are fleeing domestic violence who are trying to avail themselves of services and get back on their feet, 1/3 are “hippies” who choose that lifestyle, and 1/3 are a criminal element that inflicts harm on the other 2/3.

Gard said that Neighborhood Services tries to direct the majority of people that they deal with in encampments to Hope Campus. He said Hope Campus is currently at capacity, but that many who live in the camps do not want to go to a facility. They want to live as they are. Director Christina Catsavis asked how much of the homeless population seems to be dealing with mental illness or addiction. Gard said that while they do come into contact with some who are impaired (and they try to recommend them to Next Step or emergency medical services), the majority that Neighborhood Services comes in contact with in the camps have made the choice to live their lifestyle. He said that 65-70% are living there by choice.

Director Morton suggested Neighborhood Services offering bus tickets for people from elsewhere who are stranded here and want to go back home where they have family or a support system either directly through the City or through a partnership with Next Step.

Director Settle suggested that the ordinance include specific language regarding exceptions for the right to protest and for parades.

Two ordinances, one for private property and one for public property, with the original Grants Pass ordinance language plus stronger language added from other cities and some language suggested by the Board will be crafted and reviewed by the City Attorney and will be up for a vote at the first regular meeting in December.

During the Citizens Forum section of the meeting, Patrick McGuire spoke. He suggested more covered shelters with seating should be added to the Transit bus route to encourage more ridership. He also mentioned the number of people he has seen on Rogers Avenue between 46th and 74th that run red lights. He suggested greater enforcement and greater penalties for running red lights.

Richard Tender spoke. He expressed concerns about panhandlers. He mentioned being deterred from visiting downtown at night because of the homeless. He said that homeless people tore up the Old-Western reenactment town that an organization he is involved in built downtown. He said that he has offered homeless individuals work for pay and that they did not accept it. He also suggested that more Old West themed artwork be installed in town and that more Old West themed promotion be done for the city.

Kimberly Fodge spoke. She asked if water loss from leaks is treated or coming from the lake. Director Martin answered that it is treated. Fodge asked the cost of treatment. Director Morton answered a fraction of a penny per gallon. Fodge advocated for the City fixing the water leaks. She also advocated for increases in water rates on the lowest usage tiers saying that everyone should be charged as much as it costs to produce the water. She suggested that AMI meter project financial information be considered prior to any rate increases.

Dan Williams spoke. He said that the City has received $4.3 million for homeless services since 2001 and needs to take accountability because homeless people show up here because of the amenities offered. He also mentioned the Internal Auditor position still being vacant puts extra work on other departments. He expressed concerns about the CBID spending their funds on their contribution to the downtown alleyway lighting and art project. He expressed concerns about water leaks. He suggested that the cost of the AMI meter project study come out of Geffken or Dingman’s pay.

Krystal Cadelli spoke. She expressed concerns about the cost of water leaks. She expressed concerns about failing the bond covenants and about the consent decree. She voiced disagreement with the City applying for grants for other projects besides the consent decree and utilities projects. She suggested that the Board gather more information before voting on the Scenario #1 water rate adjustments. She mentioned recently collecting signatures for Ward 1 and Ward 2 recall election petitions at Creekmore Park and said that Geffken told them that they were breaking the law.

Molly Echavarria spoke against the AMI meters. She expressed concern about funding them through a revenue bond being taking on more debt. She said that meters are not a big issue. She voiced a desire to allow citizens to have the option to opt out of the upgrade to the AMI meters citing privacy concerns because Utilities could see when you are likely home or not, cybersecurity issues, utilities employees losing their jobs, cost of implementation, and health concerns from electromagnetic fields and wif-fi signals. She also expressed support for the flat rate water structure option.