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Board presses utilities staff on outside customers after Arcoma, South Sebastian users contest rates
Summary
Board members discussed wholesale and outside customer wastewater and water billing after Arcoma’s discounted wholesale sewer rate and South Sebastian/James Fork customers’ complaints about a 50% surcharge.
The Fort Smith Board of Directors discussed water and wastewater service arrangements for customers outside the city, focusing on a town identified in the packet as Arcoma and on former South Sebastian County (James Fork) customers who were switched to Fort Smith billing.
Utilities Director Lance McEvoy reviewed the technical and billing background for Arcoma, saying the town’s wastewater discharge is metered at a manhole and that Arcoma pays for its own local collection system. “That wastewater discharge does go through the Mill Creek Pump station and thus could impact the use of the EQ Basin there,” McEvoy said. He told the board Arcoma’s wholesale sewer bill had been $2.69 per CCF while Fort Smith citizens pay about $8.45 per CCF.
Board members pressed administration on how the lower rate had persisted despite arrears. McEvoy said administration and utility staff had met Arcoma several times and had previously waived late penalties to try to establish a payment plan; he said no successful payment plan had been completed and the city’s legal department had sent a letter noting arrears. Board members expressed frustration that this situation persisted for years without clearer reporting to the board.
Several board members said the city should not subsidize non‑city customers. Director Neil Martin asked for the historical dollar difference between what Arcoma paid and what the city would have received at Fort Smith’s rate; McEvoy supplied a 2024 illustrative difference stating that at 2024 rates the gap would have been roughly $707,640 (not including base fees) and said he would provide more complete back‑period figures. Director Kemp warned the lower rate affects debt service coverage and operation and maintenance budgeting.
Separately, two residents raised a related concern about being moved from James Fork (South Sebastian County) to Fort Smith billing and now facing a 50% surcharge. A resident said the change took effect last November/December and asked why she now faces large bills after previously paying James Fork rates. Administration noted the 50% surcharge for some outside customers is authorized by state law and that the city applies a 50% surcharge for certain outside users; staff offered to provide detailed billing and timeline information to affected customers.
No formal policy change was adopted at the meeting. Board members directed staff to provide a detailed accounting of Arcoma’s arrears history, copies of the intergovernmental agreements in place (the packet included a sewer agreement dating to 1980 and references to older agreements), and lists/maps of non‑city customers who use Fort Smith wastewater services. Several board members asked staff to return with options for accelerating collection or enforcing the city’s contractual rights, including shutting off water service under the existing water agreement if nonpayment persists.
