City exec crosses fingers for no penalties over decree slip-ups

FORT SMITH — The Fort Smith city administrator said officials do not believe that missing two milestones with its federal consent decree will result in any stipulated penalties.

Fort Smith officials signed a consent decree in 2015 with the U.S. Environmental Protection Agency, the Department of Justice and the state agreeing to make an estimated $480 million in repairs and upgrades to the city’s wastewater system over the course of 12 years to clear up chronic violations of the federal Clean Water Act.

City Administrator Carl Geffken said last week that although Fort Smith, the EPA and the Department of Justice disagree at times, they are working together on the issue of the consent decree.

”And with the communications that have been going back and forth, I would believe that they would have notified us if they were thinking of assessing any stipulated penalties,” Geffken said. “Our attorneys do not believe so, and in working with our congressional delegation, there’s not been even a thought about that either.”

”When you consider everything that has happened, and EPA and DOJ are aware of that, of the [Arkansas River] flood from last year, covid-19 now, and the impact that’s having on the entire country. They’re taking all of that into account.”

Geffken said Fort Smith has been working in good faith on the consent decree over the past five years, having spent at least $135 million on fulfilling the requirements it contains during that time. The EPA and Department of Justice have also been working in good faith with the city on the issues it has brought to their attention.

He said city officials believe in the Clean Water Act. They want to achieve, and

continue to achieve, the requirements under that act.

“We will need to continue to work with the EPA and DOJ and the Arkansas attorney general to continue to show that there are issues that will affect our ability to comply, but … we want to comply, and we will continue to do as much work as possible to continue to do so,” Geffken said.

The Environment and Natural Resources Division of the Department of Justice did not respond to a request for an interview.

WHAT WAS MISSED

The city submitted its required 2019 annual report for the consent decree before its March 31 deadline, according to Geffken. City Utility Director Lance McAvoy outlined the two milestones that were not met in a letter dated Feb. 17 that was included in that report.

For the first milestone, McAvoy wrote that the city was to have completed all 2015 sewer system assessment remedial measures work by Dec. 31, 2019. The staff found that about 5% of the remedial measures in the 2015 sewer system assessment were to be cured-in-place pipe, with there being about 55 line segments, totaling about 15,200 linear feet and about 228 service connections.

Although the former city utility director and deputy director of utility engineering had set these aside to create one cured-in-place pipe project, the information on the project was not passed on to the current staff before the former officials’ departure in September, according to McAvoy.

The staff is reviewing the actual need for the project to make sure each segment is related to and/or contributes to a sanitary sewer overflow. The evaluation, design and bid of the cured-in-place pipe projects that are determined necessary are expected to be completed by the end of May, with construction to begin as soon as possible once the contract is awarded.

The consent decree also requires, McAvoy said, that the city complete and submit the remedial measures plan for the 2018 sewer system assessment work. However, despite the fact that the 2018 sewer system assessment has been completed, no design work has been done. The 2016 and 2017 sewer system assessment remedial measures design are done, but the city does not have enough funding to construct those projects. The city has been waiting to discuss how to best spend the funding available.

McAvoy said city leaders believe that instead of designing a complete basin or sub-basin rehabilitation, it would be more advantageous to use the sewer system assessment in conjunction with known sanitary sewer overflows and remediate what causes the sewer overflows.

“Such non-targeted rehab investments will undermine the city’s ability to prioritize the most beneficial investments and to keep the existing system running,” McAvoy wrote. “Mindlessly fixing all identified defects is simply not a financially responsible action.”

The staff is evaluating the identified defects in relation to known sanitary sewer overflows and will develop a plan to remediate “the defects that matter,” McAvoy said.

PENALTIES, PRECEDENT

In Paragraph 106, the consent decree lays out stipulated penalties for failing to meet a deadline to complete any of the remedial requirements. If fully assessed, the city would have to pay $750 per violation per day for a period of noncompliance ranging from one to 30 days. From the 31st to the 60th day, it would be penalized $1,500 per violation per day, and $3,000 per violation per day after 60 days.

However, Geffken pointed out that the consent decree also states, in Paragraph 116, that the United States may, in the unreviewable exercise of its discretion, reduce or waive stipulated penalties otherwise due under the consent decree.

Geffken also said Fort Smith received a letter from the Department of Justice in 2016 for stipulated penalties related to overflows in the previous year. The actual amount of the penalties, according to the consent decree, would have been $241,800. However, it was decided that the city would be assessed only 50% of that amount, $120,900.

The stipulated penalties were retracted after more than seven months of working with the Department of Justice and the EPA, Geffken said. They also told the city about ensuring that it files for force majeure when it is appropriate.

“So they retracted that because they understood the information,” Geffken said. “And I’m not saying that it’s an easy process, no, because if it were an easy process, everybody would do it and it would eliminate the impact of a consent decree. But after seven-and-a-half months, they retracted it.”

Geffken said this demonstrates that the Department of Justice and the EPA followed Paragraph 116 of the consent decree. He expressed his hope that they would not assess the stipulated penalties for the milestones the city recently missed.

“It is their unilateral right to do so, and I recognize that,” Geffken said. “But … we have been working together so hard and for so long, and we haven’t always agreed, but we’ve been working together, that it would almost be counterproductive … to do that.”

Geffken said he thinks all these entities will continue to work together.