FORT SMITH, Ark. — The Fort Smith Board of Directors voted 5-2 on a water rate increase at a special meeting on July 11. This will impact contact users outside of the city as well as commercial and industrial users.
The changes will go into effect on Aug.1. The average user is expected to pay around $5 more.
"Unfortunately, the cost for the city to do business has gone up dramatically," Carl E. Geffken, city administrator, said. "First and foremost, we're not covering the operational cost of providing clean, safe drinking water. And so the board understood that tonight."
Directors voted to table the water rate ordinance that would increase costs back in April. Directors said they needed more time to talk about how to fairly charge customers. They also held multiple public input sessions to hear thoughts from residents.
The city hasn't raised water rates since 2011. Geffken said with inflation, things are much more expensive. The city is currently selling water for less than what it costs to produce it, meaning the city is losing money.
"Purchasing chemicals to make sure the water is safe and clean to drink, making sure having the sufficient staff," Geffken said. "In order to provide safe, clean drinking water and meet the requirements, the state and federal requirements. There are costs that we have to incur. And so it's been a long process."
The delay in the process made the city unable to cover debt service ratios for the bond covenants as well as daily operations. Geffken said this will now help them make progress.
"That will help us have sufficient funds to operate the utility, the water side of the utility department, and put us on a path to achieving compliance with our bond covenants," Geffken said.
Director Kevin Settle has been outspoken against the increase. He voted no on Thursday.
"What are we going to do to cut? Just giving us the option to raise rates. What's the option? What do we have to give up to get to our coverage we need for both debt service and required debt service coverage? Nothing was presented to us except rates," Settle said.
Jarred Reggo, director and vice mayor, said he believed they are already facing significant consequences of waiting this long.
"There is a cost to deliver high quality, clean water efficiently to the residents and users outside the city from our water system, and it's the responsible, correct, prudent, and disciplined thing to do to take the action tonight to raise these rates," Reggo said.
A second rate increase that was supposed to take place starting Jan. 1 was not voted on and will be decided later in the fall. Geffken said they want to weigh other options like cutting spending in the utilities department.
The current increase will go towards maintaining daily operations but future rate increases would also allow the city to complete many necessary projects.
"We need to make sure that we build a new water transmission line to meet the needs of the city and its contract users, not only now, but in the future as well," Geffken said.
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