Highlights of the Fort Smith Board of Directors Meeting 2/6/24

The Fort Smith Board of Directors meeting held 2-6-24 began with the Board voting unanimously without discussion to approve a zoning change for 6515 South Zero that will allow for the former Trinity property management office building to be redeveloped into Boys Home of Fort Smith, a boys shelter.

The Board voted unanimously to approve a zoning change for 4322, 4324, 4326, and 4328 Grand Avenue to allow an undeveloped lot to be developed with a 4000 square ft shopping center with two suites, one of which will be occupied by a Farmers Insurance office.

The Board voted unanimously in favor of a zoning change for 8100 Phoenix that will allow for an undeveloped lot to be developed into a two-story multi-specialty Mercy cancer medical clinic. Directors Rego, Martin, Morton and Settle all thanked Mercy for their investment. Director Rego also thanked the Cherokee Nation for their significant financial contribution that will help with the new facility.

The Board voted unanimously without discussion in favor of a zoning change for 6002 South 31st that will allow for an undeveloped lot to be developed into a 25,500 square ft single story warehouse.

The Board voted unanimously in favor of a change to the Limited Tort Claims policy that will allow for the City to make payments of $2500 each (until the budgeted amount for such claims is exhausted)for damages to personal property caused by flash flooding. This issue was tabled at the January 18, 2024 meeting so that the proposed policy could be revised. The revised version up for a vote at the 2-6-24 meeting differed from the one presented at the 1-18-24 meeting in that it included wording to allow for payments for flood damage in proximity to a City controlled drainageway that was not properly maintained and kept clear, that it no longer requires properties to be outside of National Flood Insurance Program flood plain areas, and no longer requires homeowners or tenants to carry flood insurance to qualify for payments.

Director Settle asked who gets the payment if a property is rented, the rental tenant or the property owner. Deputy Administrator Dingman answered that the payments are to to cover personal property so the payment would go to the renter. Dingman also clarified in response to questions and comments from Directors Settle, Morton, and Christina Catsavis that the payments would be limited to one payment per address, so if there were multiple flash flooding events in a short span of time, each property owner or tenant would only qualify for a payment once, not for each event.

Director Morton said that he is “hopeful this doesn’t have to be applied too many times in the future” because the City is catching up on projects delayed by Covid and the Acme Brickyard detention pond project should also help with drainage. Director Morton suggested that anyone who denies the City an easement for a drainage related project should be ineligible for the payment. City Administrator Geffken said that City Administration would take that into account when making the determination regarding if a property is eligible for payment.

Director Rego called the payments an “interesting and unique thing the City is trying to do” in an effort to be “compassionate”.

Director Settle requested that the Board revisit the issue and hear an update in one year to see and discuss how many claims are paid out over the year and to whom and whether it was worth it. Geffken agreed that that item would be placed on the agenda next year.

The Board voted on replacing the leaking cast-iron pipes and joints around the activity pool and lazy river at Parrot Island Water Park with PVC. The cost of the $379,000 project will be split with the County resulting in the City’s share of the cost being $189,500. The repairs need to be made to prevent having to close the lazy river and the 4 body slides this summer.

Director Morton praised the water park as an amenity in general but questioned that the growth of expenses seems to have exceeded the growth in revenue the last few years. Parrot Island manager Drew Peterson said that some of the expenses on the report Director Morton was looking at included a new slide and leaks that have already been fixed. Director Settle also mentioned the rise in labor cost and the labor for the new amenities added to the park over the years like the additional slide and the flow rider. Geffken mentioned that there was a difficulty last year with a labor shortage making it challenging to find lifeguards for Parrot Island as well as for Creekmore Park and that this year salary increases should make the pay more competitive to try to relieve that problem.

Director George Catsavis asked who the original contractor for the park was. Director Settle answered that it was Flintco. Director George Catsavis expressed concern that when he asked a pool company about the issue they said that metal joints should never be used. Peterson agreed and said that they all would have to be replaced and that while ARM (the management company for the park) was not there when the park was being built he guessed that the metal parts were used because the builder could get those supplies faster to be open on time and to cut costs. Director George Catsavis asked what “surprises” could be expected in the next 10 years from that and other corners that were cut. Peterson said that there would be more replacements for the metal parts near the wave pool and the kiddie pool. Director George Catsavis called it a “waste of tax payer money.”

Director Christina Catsavis asked about why the number of birthday parties at the park in 2023 increased by 22 but the revenue from birthday parties was down $11,000. Peterson answered that that was because the way parties versus food are accounted for was restructured, that the revenue did not actually go down, but the party food part is instead now included in with the food section instead of the party section.

Director George Catsavis asked how much the admission for the park costs. Peterson answered that it is $25 per person over 48 inches tall for out-of-county residents and $20 for in-county residents over 48 inches tall and $18 per person for out-of-county residents under 48 inches tall and $15 dollars for in-county residents under 48 inches tall. He said that 60% of admission tickets are sold to out-of-county residents (partly because many Fort Smith residents buy season passes rather than individual visit tickets).

Director Morton said that he is “extremely pleased with the 113,000 attendance.” He also mentioned the joint meeting with the county Quorum Court in 2019 that included an extensive discussion of price increases to be enacted at that time and suggested that the Board of Directors should always have to approve any admission price increases. Director Settle argued that Peterson is doing a good job and that management of the park should be left to him and the management company.

The allocation for the funds for the repairs passed with all but Director George Catsavis voting in favor.

The Board voted unanimously to approve for Walther to participate in the Tax Back program that allows for refunds on sales taxes paid on building materials and equipment associated with the manufacturing facility’s expansion. Director Settle said that he is looking forward to the expansion. Director Martin said that it was a “good night for economic development” and that the expansion of Walther is a “wonderful thing for the city.” Mayor McGill mentioned that it is a good sign about the environment and work force in Fort Smith that companies with a nationwide presence are choosing to expand in Fort Smith.

The Board voted on entering into a Consent Administrative Order with the Arkansas Division of Environmental Quality in response to the water from the Massard treatment facility having excessive ammonia-nitrogen levels. In the agreement, the City agrees to correct the problem and to pay the fines. ADEQ agrees to reduce the fines and put the fines on hold while the City is working on fixing the problem.

Director Settle expressed concern that the agreement gave him the “eerie feeling of the consent decree”. He asked about the City being out of compliance in the summer and fall except for September. Utilities Director McAvoy clarified that there are only limits on ammonia-nitrogen in May through October. Director Settle mentioned that other cities use lagoons and called the ADEQ calling Fort Smith out for a “minor” issue “hypocrisy”. McAvoy clarified that lagoon systems also have limits. Director Settle said that lagoons are easier than what Fort Smith does with our water treatment.

Director Morton asked if there would be a plan ready in 30 days that would resolve the issue. McAvoy said that there was a plan already being worked on for a cheap short term fix that would use putting smaller basins that have been decommissioned back into service. That would cost under $300,000 and if it works as hoped it could be a “bandaid” to buy the City time to find funding for the $20-25 million needed to build a new aeration basin. Director Morton said that “ADEQ has been very lenient on this considering what they could have done.”

Director George Catsavis asked the difference between this Consent Administrative Order and the Consent Decree. McAvoy clarified that the Consent Decree is between courts and this is an agreement directly between the City and the State agency. Director Catsavis said that he is “leery” and “gun shy” about wastewater issues because of the experience with the Consent Decree. Geffken said that by entering the agreement and addressing the issue now the City is “being proactive” to not let it reach the point of a consent decree and that the agreement “keeps control in the state of Arkansas” instead of letting it possibly end up added to the federal consent decree requirements. McAvoy said that if the agreement is not approved and a solution is not achieved soon that the EPA and DOJ could add it to the consent decree and want the $24 million dollar solution right away instead of the cheaper bandaid solution and also charge the full fines. Director Martin added that the City ended up under the consent decree after violating administrative order after administrative order for years. City Attorney Canfield said that Paul Calameta, the lawyer in charge of Consent Decree matters, also advised that entering the consent administrative order with the State would be best and that it would be better than potentially ending up dealing with the DOJ and EPA on the issue.

Director Martin agreed with Director George Catsavis that he, too, feels gun shy about wastewater agreements.

Director Martin asked what threat high ammonia-nitrogen levels pose to the river and to citizens. McAvoy answered that the allowable levels are based on toxicity to fish. A large fish kill could happen, but so far no fish kill or other toxic event has occurred here yet as a result of the non-compliant levels.

Director Martin asked if the short term solution could be in place by May 1 when meeting level limits starts being required again. McAvoy said that if the equipment arrives by the end of March as expected that it could be. He said that the bacteria used in treating the water works best in 85 degree water. Currently the water in the aeration basin is around 50-60 degrees. In the past, they used a blower that was very old and produced heat and that they would turn it on April 1st to heat it up and help the bacteria grow. In 2022, that old blower gave out. New blowers don’t produce heat like the old one so the bacteria takes longer to grow.

Director Settle said that more basins won’t solve the issue. He said what is needed is heat exchangers. The temperature increase from the old blower is what has changed in the process that has resulted in non-compliance. He said that the Board should have had a solution presented to them before they are presented with the resolution for the agreement. He said that he can’t approve the agreement without first having the cost to resolve the problem.

Director Morton motioned that a resolution be brought before the Board at a future meeting requiring that at any meeting to negotiate with the ADEQ that the Mayor and one Board member be present to observe, like is done with meetings regarding the consent decree. He said that since the Mayor and a Director have started observing consent decree meetings that the Board is “a lot more informed than we were in the past” and that it would help avoid “a big surprise”. The motion found consensus and the issue will be added to a future agenda.

Director Martin asked about the cost for the solution coming back to the Board for approval. Geffken assured that any expense over $50,000 would have to come to the Board for approval.

Director Rego expressed his view that comparing the consent decree with a $3600 penalty from the State is “a stretch.” He also said that “We have a responsibility” to meet water standards.

Director Good said that the situation is not like the information before the consent decree in that the Board is “getting a lot of info”. He called the agreement an “opportunity to address it now instead of getting it dropped on us.”

Director Christina Catsavis expressed that she felt “very strongly” that if the agreement doesn’t pass that it would send the wrong message about the City’s commitment to addressing wastewater issues and that it would hurt the relationship with the ADEQ and EPA. She said that Senator Boozman recently advised on the importance of the relationship with ADEQ and that if your own state is not defending you that the federal agencies won’t work with you. Mayor McGill said that the current good relationship with the EPA, DOJ, and ADEQ “didn’t happen overnight” and “took work.”

The vote to enter into the Consent Administrative Order passed with all voting in favor except for Director George Catsavis who abstained from the vote and Director Settle who voted against.

The Board voted on an additional $46,710 for the contract with RJN Group for design services for consent decree sewer work resulting from changes in scope to the project mostly stemming from dividing the previously one combined project into 5 separate projects that could be bid on individually. The original contract was approved at the 12-19-23 meeting following contentious denial of the contract for Vortex to perform the one combined project.

Director George Catsavis expressed frustration with what he perceived as “a lot of politics” being involved in the bidding and rebidding and breaking up of the project. He said that Vortex should have gotten the bid.

Director Morton said that the $21 million bid from Vortex being the only bid and it being so much higher than the $15-16 million estimate was the real problem for him that causes him to support breaking project up and seeking more bids.

Director Good said that multiple bids will likely guarantee somewhat lower cost since they have already seen the detailed bid from Vortex. He said that he wanted to Vortex to go ahead and perform the work and that it was not Vortex’s fault that the City didn’t receive multiple bids on the project. He acknowledged that price matters, but said “This is about principle,too.”

Director Christina Catsavis questioned if since the project now has a longer timeline for completion if the new updated might not be enough on its own to help encourage more bids instead of spending another $47,000 to break up the project. Some companies that didn’t bid originally said that the deadline was why they didn’t bid. McAvoy said that that alone would not be enough and that also they might not get any bids at all this time. Geffken reminded that Vortex could still bid again, on any of the 5 projects or on all of them put together. McAvoy said that the EPA consultant recommended that the project be broken up to get the best price.

Director Morton expressed a desire to move fast to get the work completed. He also suggested that when bids are solicited for the projects that the bidders be asked to include their expected completion dates.

Director Good asked if the separate projects could be worked on all at once or if they would depend on coordination from different companies with each other. McAvoy answered that the projects are designed by job type not geographic location so some would require coordination. Director Good expressed concern that that could be “nightmarish”. McAvoy said that sometimes it could be but that it is “done all the time in the industry.” Director Morton said that when building a building you hire a contractor and they hire subcontractors who handle all the specialties and asked why it wasn’t being bid and handled that way. Geffken and McAvoy said that the way it is being handled is the way the EPA said it should be done and that when doing it by geographic area instead of type of work was suggested by the City that the EPA said that way is not better and “That’s just wrong.” Director Morton said “No wonder this so expensive and so slow.”

Director George Catsavis asked if Vortex came in under budget on their last project for the City. McAvoy confirmed that they did.

The contract with RJN was approved with Directors Good and George Catsavis voting against it and all others voting in favor.

The Board voted to declare breach of the contract with Goodwin & Goodwin for work on a consent decree sewer project that has not been completed and to notify the surety on the payment and performance bond of the breach and requesting the surety address the issue and secure completion of the work (be it through having Goodwin & Goodwin complete the work in a timely manner or through terminating the contract with Goodwin & Goodwin and having another company perform the work). The resolution voted on only deals with authorization of declaring the breech and sending the surety the letter, any termination of the contract with Goodwin & Goodwin would still need to return to the Board for a vote on that. The contract was initially issued January 19, 2021 for a total of $3,485,749. There is $1.2 million remaining still to be completed on the project.

Matt Horan, attorney for Goodwin & Goodwin said that while it looks like the contract is only 60% completed and that there is a little over a million dollars still to be performed, in reality there is only $150,000-$155,000 (plus about $60,000 for camera work to be done upon completion of the whole project) still to be done and that it should all be able to be finished in about 5 weeks. He said that to declare default and terminate the contract when 95% of the work has been done would take longer to get it done by the bond surety finding another company to finish the work than it would to just have it done by the existing contractor.

Directors Morton and Martin both expressed concerns about the project coming up so significantly under budget. Director Morton said “That doesn’t add up to me.” and Director Martin asked if it was really only $150,000 and 5 weeks left why it wasn’t done already.

McAvoy said that the project was supposed to be “significantly complete” in July 2022 and that it is still not complete. He said that in terms of linear feet of pipe at first they were “going gangbusters” but then “trickled off”. He expressed concern about the message the delayed work is sending the DoJ and EPA.

Director Settle asked if Goodwin & Goodwin had completed any other water projects. McAvoy answered that yes, they have just finished Pump Station 6 and it was overdue and other projects they had done came in behind schedule. Director Settle said it “Doesn’t add up.” and that he expects that the total for the rest of the work on the contract would not be $150,000 but rather would get up to the full contract amount quickly. He said “They chose other projects over this project.”

Director Christina Catasvis said that if Goodwin & Goodwin can do it for $150,000 in 5 weeks and save a million dollars the City should “see if they can do it.”. She said she is “certainly interested in giving them a shot to save a million dollars.”

Director Morton agreed with Christina Catsavis. He suggested setting a 6 or 7 week deadline and then if it isn’t done to go ahead and move forward with pulling the performance bond. He expressed concern about having a performance bond pulled affecting the ability of Goodwin & Goodwin to get future performance bonds issued to perform other work, that it could put the local company out of business. He expressed a preference for better communication, talking directly to companies on the phone first before escalation. He said that the project has waited 2 years, it could wait 6 weeks, and that that would be better than litigation that could result in 2 years from now the project still not being complete. Morton said that direct communication is how business is conducted in the world outside of City business. McAvoy said that “abiding by a contract is how work is done in the real world.”

Geffken said that there has been communication with Goodwin & Goodwin’s lawyer. Geffken said that taking action to notify the surety of the breach “will protect the City.”

Director George Catsavis asked if there have been other hiccups with Goodwin & Goodwin projects. McAvoy said there had not been any to this degree. Canfield said that there had been one case that had to be litigated all the way to a jury trial (that the City won). McAvoy said that under State procurement law a vendor can be disbarred from bidding for up to 3 years.

Director George Catsavis said to give Goodwin & Goodwin 5 weeks and if the work isn’t done pull the bond.

Director Morton acknowledged that he had been confused about the extent of the action that the resolution to be voted on would result in if passed. He thought that it would set it in motion that in 7 days the bond would be pulled and the contract terminated. He said that he wasn’t opposed to it in light of it allowing an opportunity to work things out and to potentially have the project completed in 6 weeks for $200,000.

The Board voted in favor of declaring the breach and notifying the bond surety with all but Director Christina Catsavis voting in favor.

The Board voted unanimously in favor of drainage projects for Hardscrabble Way and South 56th, the 2600-2700 block of Dallas, and the 2700 block of Glen Flora Way. The total cost for the projects would be $193,280.

Three houses in the impacted area of Dallas denied the City the temporary construction easement necessary to perform the drainage work on their property. Director Morton called it ”a mystery” to him why they would not give temporary easement for the improvement. Engineering Director Snodgrass said that it was those property owners felt that some work on the streets upstream nearby had solved the flooding issue so that it would no longer be a problem. Snodgrass disagreed that the other work would be a fix for the issue. Director Settle asked if the denied easements and lack of work performed on those properties would negatively impact other houses. Snodgrass assured that it wouldn’t impact others. Settle asked why eminent domain was not used to obtain the easements. Snodgrass answered that the policy in the past has been to get the easements voluntarily so that they are donated rather than having to buy them as you do when you use eminent domain.

Director Morton suggested that those homeowners who had denied the easements be denied the $2500 payment for personal property damages if flooding occurs. Geffken said that would be taken into account.

The Board voted unanimously in favor of a drainage project for East Valley Road and South X near Hardscrabble Country Club that will include a detention pond. The cost for the project will be $2.2 million.

Director Martin asked with the cost of $2.2 million if it would be cheaper to just buy the houses prone to flooding. Snodgrass said that in addition to the houses that flood there is “pretty hazardous over-topping” on the street.

The Board voted unanimously to end the contract with Forsgren to fix water leaks and install new meter boxes. The contract was initiated September 21, 2021 for a total amount of $3,067,050. So far, 619 leaks have been fixed by Forsgren at an average cost of $4,248.05 per leak. There is still $437,508.63 left on the contract and 150 leaks still left on the list for Forsgren to repair. However, Forsgren did not perform any work in November, December, or January and has said that they are not interested in continuing the contract and continuing to fix the leaks.

Director Morton said that water leaks are a problem and “we need a solution.”

The Board voted unanimously to issue a two year permit to Budget Bins for non-residential solid waste collection.

The Board voted unanimously to purchase from River City Hydraulics three additional Heil rear-loading garbage trucks at a cost of $404,843.09 each to facilitate the return of servicing regular trash, recycling, and yard waste every week rather than only recycling and yard waste every other week and one replacement Petersen TL3 knuckle boom truck for $298,157.66. The total for all of the vehicles will be $1,512,686.93.

Director Morton pointed out that the totals on the invoice don’t include sales tax though sales tax would apply to the purchases. Solid Director Riley hadn’t noticed that already. Director Morton wondered if perhaps the bid had been presented with sales tax already figured in.