Fort Smith staff propose $3.60/CCF wholesale rate for Arcoma, with five-year term and payment plan

Acting City Administrator Dingman introduced a framework for a wholesale wastewater agreement with the Town of Arcoma that would set a wholesale volume rate of $3.60 per CCF with a 3.5% increase each January through 2030 and a five-year term allowing early termination if Arcoma builds its own treatment system. Dingman said the Choctaw Nation’s water resources team reviewed the rate and provided an independent analyst’s support for the figure.

Several directors questioned whether $3.60 covers the true cost of treatment and whether Fort Smith’s own consent-decree obligations are being subsidized. Director Deo Martin noted Fort Smith residential customers pay about $9.05 per CCF and asked whether debt service tied to consent-decree work was built into wholesale calculations; staff replied that debt service is part of their methodology but that the consent-decree projects are not paid exclusively from operating revenues. Andy, a city staff member who helped calculate the treatment cost, said his methodology produced a treatment cost near $3.36 per CCF and that a 10% return-on-investment was included to cover future capital and maintenance.

Directors asked staff to provide a customer-level comparison showing Arcoma’s current base fees and usage charges so the board can verify whether Arcoma residents already pay rates comparable to Fort Smith’s total bills. Dingman said staff will refine the proposed agreement language, identify a payment plan for past-due balances, and return with the requested data at a future study session.

"The proposed agreement principles include a wholesale wastewater volume rate of $3.60 per CCF," Dingman said during the presentation. The board did not adopt the agreement at the study session; members directed staff to bring back the finalized terms and accompanying data for further review.