Good evening and welcome to the city of Board of Register Study session.

These meetings are being recorded for the purpose of our residents who may not be able to be with us in person this evening.

Thank you, Mayor.

The first item this evening relates to ongoing discussion we are having with the town of Arcoma related to an agreement for the treatment of wholesale wastewater services.

After our coma and Fort Smith failed to reach an agreement last summer, the Choctaw Nation of Oklahoma offered to use their water resources team as a third party advisor.

And if the board of directors agrees, then we will work to finalize an agreement that both that both governing bodies will approve.

Much as our regular wastewater rate ordinance provides.

This rate was reviewed and supported by the Choctaw team's independent analyst.

A term of five years for the agreement with provisions for early termination if our coma establishes a proper wastewater treatment system of its own before the term expires.

A determination of an amount owed for services and not paid as of the effective date of the agreement as calculated with the rates included in this agreement.

The agreement provides that a payment plan for this amount owed shall be established as part of the agreement and continue until the amount owed is paid, even if the service agreement terminates early.

It is to Fort Smith's benefit that our coma handle its own wastewater.

So staff proposes that any late fees or penalties not be included in the amount established as owed.

This would be similar treatment to the stipulated penalties that we currently that we often discuss related to our consent decree.

With us tonight, our representatives, I think from Marcoma.

I think I saw someone from our coma.

And we have representatives from the Choctaw Nation of Oklahoma and their water resources team to perhaps answer any questions as to their role in this process.

We also have several staff persons, Andy Richards, Lance McAvoy, myself, Maggie, to uh respond to any of the board's questions as well.

With that introduction, staff will defer to board's discussion on this item.

Okay, thank you very much, and thank all of our guests for being here this evening.

Uh any discussion from the board on the proposal.

Oh, yeah, definitely.

You want me to start asking questions?

Yes, sir.

All right, can I get Andy up here?

So Andy, as you're walking up, I had to I had to refresh myself, and I'm just gonna get I'm gonna get the discussion started.

Um I went back to our meeting that we had on June 10th of 2025 at UAFS, and in that discussion, you said the the cost to treat a CCF of wastewater is three dollars and thirty-six cents, is that correct?

And is that math still work with you know after a year?

Yeah, I think the yeah, so we came up with that's with that's without the uh that's without the INI adjustment or anything.

Is that that's right?

Okay, so I guess as I'm as I'm sitting here thinking through this, and and and we're talking about a negotiated rate of $3.60.

So there's a a slight um increase in terms of uh costs, uh there's there's return on investment there or ROI is what I think is what was in the packet from between $360 and $336.

So there would be a difference there of of that amount.

My question is that $336, that's what it costs to treat a CCF of sewer, but then that's that's as it sits today, as the existing infrastructure and to pay for all that existing infrastructure, three dollars and thirty-six cents.

My question is with this consent decree and the dollars that we're paying for the consent decree.

Does that not need to take does that not need to factor in what we're charging our coma?

So our our citizens are paying nine dollars and four cents of CCF, right?

Right, so and we're that nine dollars and four cents is paying for a large infrastructure project to get us in compliance with the consent decree, along with sales tax and all those other things.

Is three dollars and sixty cents enough?

To me, it doesn't sound like that's covering our coma's costs for the consent decree and the additional dollars needed for this 600 800 million dollar consent decree.

Does that make sense?

Yeah.

Well, I mean, for one thing, I mean, the can the consent degree is not funded out of our operating revenues.

This basically this rate, um, you know, I use the same kind of methodology and got very close to what our current nine dollars and five cents are for our residential and all of our sewer customers, basically, so this I use the same methodology gets similar results for that.

Um we do have the 10% ROI factored in to account for um additional capital costs and maintenance uh or future capital.

Andy, I hate to interrupt here, but don't we have a bond that's related to consent decree work that we've funded in 2018 that everybody's paying off a rates?

So back to Neil's point, the rate is paying off a bond to consent decree work is done.

It's paying off that current bond, yeah.

I mean, but that part that that debt service is part of the calculation that it's it's part of the 336.

Okay, um and again, this doesn't account for I and I, is that correct?

This $3.36 or the the um the 360 doesn't account for it doesn't account for the I and I in our system, it does account for the I and I in their system.

Okay, okay, um, is there anybody this this lagoon that they're talking about um purchasing?

Is there anybody that can speak to that from you mean specifically or in terms of how just in general how the lagoon system works?

I guess my my question is: is there do we have any concerns in the city of Fort Smith with a wastewater lagoon right across the street in our coma?

Well, I would say they have they they are going to go through the proper permitting process for a lagoon system is a proper and common application to for the small town to invest in a wastewater system.

And real quick, not to interrupt you, as are there any wastewater lagoons in surrounding communities?

There are.

I think I'm not gonna be able to Lance is nodding yes.

Just yell it out, Lance.

I mean, Barling Barling, Lovaca, um, on this side of the river, but I'm not do we have any issues with smell or anything like that from uh Fort Smith residents near well, I mean Lavaca is kind of far away, but I've got out from the fact that we are the Arlington multiple times as PEQ.

So we have no point on smell.

Oh okay.

Do they measure that?

Is that something you can measure?

I mean, walk up to the edge and take it around.

Right.

Like I can't go three miles this way and see if there's any uh measurable odor.

No, there is no measurable order within uh within the city of Barley or outside the city of Barling that I know of that has been reported to DEQ.

Um I live on that side of town of Fort Smith.

I don't smell anything from the barling lagoons.

Um, they're just the way those are designed, uh, you would not have an odor that is associated with a municipal wastewater lagoon, such as what our coma is looking at building.

Okay, okay.

I'll turn it over to some of my colleagues.

There might be some additional questions in a minute.

Thank you, Mayor.

Um, I don't know who who can answer this question, so I'm gonna ask it to administration first.

There was a conversation back when we talked about this previously of a developer looking to help pay debt if there was some agreement that could be reached.

Is that still a thing for our coma?

That's not something we've talked about recently, but you know, to it was a conclusion at that point that that a solution, a long-term solution to their wastewater uh question would be needed for that to happen.

Uh and we haven't gotten there yet.

I don't know what how our coma is as uh dealt with that over the course of the last eight to twelve months.

Um, but that's that's not something that's been part of our conversation recently.

Has this process with Choctaw Nation helping them?

Is that conveying any further assistance to them in the development of things with our coma?

They that that assistance will be ongoing.

I mean, they're they have have provided them some technical assistance, they will continue to advise them terms of uh financial and permitting um questions that they have for that process I mean we do have a a representative here uh from the Choctaw that could explain their their sort of current status of of advisement but also their their future prospects for such as well I don't know if that's a question Ms.

Rihanna wants to answer at all convey you may not and that's fine you may not have the answer.

Coming to the po the podium is Rihanna Workman she's a representative Choctaw Nation's uh water resources team thank you I just question would be is the Choctaw Nation and the efforts that you all have put forth which has been helpful to mitigate this is it purely just in support through research and analyzation or is there uh potential of an investment into that infrastructure from you all and something that's going to help them kind of in a financial sense or is it mainly just consulting?

It's mainly technical assistance so our office of the office of water resource management in our department we have something called a sustainable communities program where we provide technical assistance for reservation um public water systems through grant funding helping them find grant funding we don't provide grant funding currently um so finding state grant funding and federal grant funding for helping you know day to day system issues um and then planning efforts through asset management planning capital improvement planning things like that we have no current funding in our office for um helping with this sustainable communities program well thank you for the clarity and thank you for what you'll have done as a good neighbor to step in and be a part of the conversation thank you so much I guess the other question I have for administration is what happens if our coma doesn't make meaningful progress on the on the past payments I mean do we are we taking care of that in this agreement yes we will we will build into this uh this agreement and we'll identify specifically what that dollar amount is and identify the payment plan for for the to recover that dollar amount that they owe for essentially 2025 um and some previous to that but uh and then like I said we'll we'll build a payment plan for that and if they keep up with that and their current payments for underneath the the terms of for their usage and such as we as we build them then they stay in good standing and if that doesn't happen then we have different conversations with them and that's you know part part of the reason that we have a um we have a real a five year agreement which is relatively short is that we can revisit all of those things and you know if they get to the point where they're having some success and they can accomplish their project within that time frame then we won't need to extend that that five year agreement but if that if they don't then we have a you know then it becomes a tougher conversation in five years well why haven't they and and what's our role in that and we're confident that this is my last comment refer now are we're really confident of a 10% ROI with this three dollars and sixty cents yes and then coupled that with the the graduated increases that we've already built into our wastewater rates for five percent increases on January first okay thank you uh director johskavich Lance well thank you ma'am okay thank you let me ask you a question so we're we're gonna charge them 360 per CFF with a 3.5% increase yearly okay what are the Fort Smith residents paying for CCF right now I believe it's uh 904 I believe 905 thank you Andy 905 per C C so we're paying $905 per CCF.

They're gonna be paying $360 CCF.

Why?

Because all they're paying for is the treatment cost with that to SER.

Without for for the sewer and um whereas Fort Smith residents are also paying for the INI that happens from our system.

Okay so I would add to that that that's that's all that that's all that the residents are paying us for.

They are also paying uh system maintenance costs and such on their side for maintaining their own their own system.

Okay.

Is our coma are you going to classify them as an outside water user or a contract water user?

So they are already so what have they been?

They are a contract sewer user and they are a contract water user.

Okay, contract meaning they have to buy so much water per year.

There is no minimum take.

We are looking at putting maximum takes on most of our contract water users to have them reduce their lost water amount and to have more water available to Fort Smith.

So an outside user would be what?

That would be a contract water user, a wholesale water user, such as Mountain Bird, uh Barling, Marcoma.

Well, let me ask you one more question.

So they're past their past due 2007,000 dollars in their water payment, correct?

Um I know we've talked about this.

I I would have to defer to Andy because I know he's been keeping up with that just on the just on their wastewater side, they are current on their water payment.

Yes, their water is up to date, they've paid every water bill on time.

So the city will we'll have no involvement in improving their their service system.

The the Choctaws are going to help them with their serve.

Lagoon or whatever.

They are helping them in advisory capacity.

Of course, the state of Oklahoma will issue permits and they'll go through those processes as the state requires for them to do that.

But where's our company going to get the money to do this?

They will have to get it from their from their ratepayers and or any grants that they might be able to find and resources.

And the Choctaw will help plug them into resources that they can find them, uh in terms of applic uh uh grant programs or other programs that might be available in Oklahoma for them to participate in for this project.

So in your opinion, this is that this is gonna be a okay deal for right now.

Yes, in my opinion, it it meets where we need to be.

It helps them find a new way of treating their wastewater, which lagoons are have been around for centuries on treating wastewater, um, and then this will also take that burden once they have that lagoon completed, the burden of us treating their wastewater will be lessened.

So we won't be receiving their loading or their volume, which frees up more volume and more loading that we could have to the Pea Street treatment plant for things such as economic development compliance.

Thank you.

Any other questions?

You only have to speak to the MR.

Oh, you recognize plants.

Thank you.

Um where does the stuff where does the sewer come from?

Arcoma, what pipe does it go through?

I believe there are three different ones.

There's one kind of north, south, the main one, I believe, comes down.

I can't remember the name of it.

It's inside the city of Fort Smith, right?

It it comes to Fort Smith and then runs through a pipe that is a collector pipe for not just our coma but other sources of wastewater.

You see my dilemma here, is that we're gonna charge our citizens nine or nine oh five, and we're charging somebody 336 that has no incentive to make their own water system, wastewater system.

To me, that's where I'm I'm struggling here because there's no there's no there's no incentive for them to get off for the city of Fort Smith.

To me, if we're gonna do a contract, why don't we have a three-year contract and then they're three years or 905 or whatever the rate is in three years?

And that forces them to speed this up.

The other side I'm worried about is what precedent are we gonna set?

But the city of Barling come to us and say, hey, if you're gonna do 336, we'd like to join yours for 336 to go to Mazard.

There's no difference in my mind.

If we do our coma, barding could be next.

I will state that barling used to discharge two Mazard with the lagoons.

But that was it's cheaper for them with their lagoons than it is too until the state of Arkansas has to do something different, and then is it gonna be, hey, we set a precedent to me?

If if I if somebody developed 600 homes, literally north of John Bell Park, and they were directly within a half a mile of Pea Street plant, they're gonna be charged 905.

Yes, to me, everybody should be charged the same.

That's where I'm at or incentivize them to get off the quickest possible.

So I appreciate it because that's what I wanted.

If they had their own pipe, we can talk to it, but there's not we they share a pipe with us, it's our infrastructure, our citizens are paying for that, that's where it should be.

Thank you, Director Newmark.

Well, and I would agree with that.

Um are we incentivizing someone to live in our coma?

That's the question that I would ask.

Are we incentivize from water?

Are we incentivizing someone to live in Van Buren?

Are we incentivizing someone to live in Mountainbird, Cedarville?

All these places.

Can they get cheaper water and sewer living outside of Fort Smith?

If the answer is yes, that's a problem.

That's a problem.

There's no benefit to people living in the city of Fort Smith.

From a utility standpoint, I mean you there's there's plenty of other benefits, but if they can go literally a hundred yards from my office, maybe maybe maybe 500 yards from where I work, and their sewer bills significantly cheaper, it doesn't make any sense to me.

I mean, it no it makes sense to me if I'm a if I'm trying to choose where I'm gonna live, but if I want to live in the city of Fort Smith and I make the that decision, and now my my sewer bills significantly higher, double, if not triple, to me that's a problem.

I think I think one thing to consider, and I don't know.

Is that you know for a residential account in our coma, they have a 35-ish base rate, and then they have a usage rate that includes their portion of our wholesale rate here, plus their cost of their operations and maintenance for their utility, plus then they will have the obligations that they have for issuing any debt that they have to do to make this uh lagoon system happen or any of any of those types of things.

They will have all of those costs on top of our wholesale rate for treating the wastewater, and so it is I mean the a sewer bill in our coma is considerably higher than a sewer bill in Fort Smith for a residential user.

I'd like to see that.

Can I see that?

Not that I disagree with you, I just like to say, I think we I think we can get that I think we can show that.

I mean, you you're basically saying they're they're they're they're charging their citizens one way or another, whether it's the per CCF dollar amount or whether it's the base fee or well they're they're charging both, they have a base fee and a volume.

Which we are too, but they're just but it's it's it's their base fee is is much much higher, and then you know one of the things that Mr.

Dingman mentioned is they're paying for their INI issue, which is fairly high.

Uh last time I calculated it.

Um, and so that's where some of the excess water comes to us is from their INI, and with that, they are paying more in the aspect of what they're flushing compared, you know, compared to water meter and the if you were doing it based on the water meter, they're having to pay more because they're having to offset the INI because we meter all three of the outfalls and we charge them not based on what they sell in water, we charge them based on what comes through that wastewater flow meter, which includes INI, INI and normal sanitation.

I would like to see those those dollar amounts because our coma charges, and I think it might have been in some of our documentation that we've we've had before, but basically what I'm hearing is they're they're getting it, they're getting dollars from their people.

It just it might not be in the per CCF rate rate, it might be in the uh base fee or another fee that's attached to it.

I think it's a combination of both.

Yeah, so I I I think I want to see that in order to be able to to move forward on on something like this.

Director that thank you mayor, Mayor.

Um, Director Acting City Administrator Dingman, just wanted to thank you and staff um for working on this and getting to getting us to this point.

Um, Ms.

Rihanna, thank you for being here tonight to answer questions and just being supportive of our coma and the relationship with uh Fort Smith.

Uh just want to speak to a couple of things.

Um Director Settles spoke to um not really forcing uh our coma to do anything, but just this just the way that sounds.

I don't want to incentivize them to get their system done quickly, and that was Director Martin's uh words to incentivizing.

So I don't look at this as incentivizing.

We come to a number that both parties are agreeing on, and we are continuing making good a commitment and contract that we had previously, and we're not just making good, we're making those adjustments moving forward.

So I don't want it for people to think that we're incentivizing people to stay in our coma because our coma is just a bedroom community of Fort Smith.

So, you know, they also are part of that same group that are paying the sales tax here in Fort Smith, you know, just like the rest of us, Director Kemp.

Thank you, Mayor.

Lance, I'm sorry.

If you can come back, so when I hear you talk about us metering exactly what comes back.

So it's not just the water that was sent, it's it's now their INI and their sewer coming back to us.

We're capturing that.

Yes.

So, in a way, is it fair to say that we're billing for INI?

Their INI is being billed for, yes.

I think so.

When we talk about taking this additional charge away, we're still capturing INI by metering it exactly coming back.

And the other thing I want to point out is we're not losing money.

I mean, there is the 10% ROI built into this, so is this cumbersome to our system?

You know, take away the consent decree items of this.

I'm talking about filtration, you know, handling this through pumps through treatments.

Is this a burden to our system?

No, more so than any other user.

Um, again, it is more capacity that is taken from the system, but it is not a large amount.

Um Pea Street can treat uh it's permitted to treat 12 million gallons per day.

That's based on the ammonia limit.

Um, we have exceeded that 12 million gallons a day multiple times and not had any issues with the ammonia limit or any of our limits.

Um the plant hydraulically can treat up to 83 million gallons a day.

So when you look at the total volume that we're getting from our coma, yes, there is some pumping cost that are involved, it goes through the mill creek pump station, and then you get into the plant.

That's part of the treatment, but that's all factored into the cost of treatment that Andy did.

And I will be truthful with you.

I did a side-by-side comparison.

Uh, the first time Andy did it, and we were off by four cents, three cents in our comparison on how I how I would have calculated it, which is well within the uh accepted margin of error.

In the way that this bill would be structured going forward, we're not allowing we're going to ensure that they're paying their current bill, correct?

I know we're talking about a payment plan for past due amounts, but their current bill they will have to stay current on.

Yes.

Okay.

Perhaps a compromise.

I mean, I'm just a question from a colleague, Director Settle, Director Martin.

I'm favorable to the idea of finding a way to incentivize progress.

Perhaps it isn't a five-year agreement, perhaps it's a three-year agreement, so that the board can review it sooner than later and see what work has been taken in over three years.

But allowing them to have this progress, potential point to get started on it, and see if we can capture past due, allow them to make progress, and then evaluate it and not do five years, or put it in there that by year four or five, you know, the potential uh delinquency could be that you're going to be metered exactly what we meter for our residents.

Okay.

I think that'd be I would be uh before that.

I definitely be for that.

Director Good.

Um Mayor, I'm I'm gonna uh not comment.

I I was gonna ask a question about some information.

Well, I'm talking now.

So I know previously when we had the discussion, we had some documents from our coma's mayor that show uh what their rates are uh now and what the typical bill looks like.

And it seemed like their typical bill was at or above what we normally pay.

And I was looking for that and I I can't find it, but I'll look for it further.

But have you have we um do we have we do we have any current documents that show what they're paying right now?

What that what their bill looks like?

No, that's what I was referring to earlier.

I don't have that off the top of my head.

Okay, then certainly Director Martin asked for that comparison and we'll do that.

Okay, uh Director Gossavage.

So last year we set the rate at 875.

That's what we decided was acceptable to us, and our coma has not been in compliance at any point.

Is that correct?

They've not been current in terms of their entire scope of billing at any point.

So they're billing their people, they're just not paying us.

You're talking about how large their bills are, their people are paying it, we're not getting paid.

Correct, right.

They are paying a portion of their bill.

They're they there's not any month when they've paid their entire wastewater bill.

So if we had a resident in Fort Smith that said, I'll send you half my sewer bill.

How long would we let them do that before we shut their service off?

It wouldn't be very long.

All right.

Thank you.

Any other questions?

Mayor, Mayor, can we get some data?

Um, sitting here we're thinking through this.

Can we get the what the monthly water to our coma is to versus the monthly sewer back per month of the past year?

If I have a big IA problem, the sewer should be greater than the incoming water.

Is that correct, Jeff?

Yes.

Okay.

Is there anything else you'd like administration to take a look at?

So I I just want to make sure that we're all clear.

Um there I what I think is three things we have to consider.

One is the rate going forward, correct?

Other is the payment of past due balances, and the third one is any penalties.

Is there anything else that we as the board need to consider?

As we are, you know, moving forward with this.

Did I capture that correct?

No, and those are the those are the specific points that I was after for you to recognize as we work through this progress.

Now, I will say that as we take this feedback and we work through through this item, um, we will continue to refine and work on an agreement that works along these parameters uh to show you, but also to show you the company data that you've asked for and such, um, at a point where we think we have the agreement finalized.

Okay.

So when I look at page um 13 of our of our packet, it talks about rate change proposal rate change proposals for our coma.

How much do they owe us?

How much is outstanding that they owe us?

Currently, uh this doesn't include any fees or penalties, it's 141,000 130 141,132.47 cents.

Okay, so that's the that's the outstanding amount, and we um so like I guess I thought it was significant.

Hang on, let me find that.

Yeah, I can't.

There's a newer one, but it's not it's not what you're thinking of.

It is near it was 230,000.

That's that's what I'm trying to get at is we we they were paying a portion of the bill that was somehow less than what we're billing.

But I remember that number was getting a little bit more.

It was getting really close to 400,000 because the base rate that we were using for that calculation was the 875 and then nine dollars and five cents.

Okay, okay.

So this 141,000 is based at the 360 rate.

360, yes.

Yeah, we had this discussion last year and I thought that we arrived at a rate that we put a lot of thought into we had a lot of that information in front of us last year and that's what we felt like was acceptable.

Well both the when we voted on it both of them failed the 360 rate and then the 556 rate I think is what was both of them failed none of the we didn't pass it.

And so by both of those not passing it defaulted to the 875 rate that the citizens I think I think actually we didn't really even consider them because at that point our coma was in a position where they were saying they couldn't agree to either one of them so I don't think we considered it or passed and failed it.

Okay but we did vote on it and neither I don't know that I don't think we did I think that we got the feedback from I think I've got it I think I've got it vote on it.

I think we put quite a bit of time I remember at that study session at UA Ford Smith we put quite a bit of time into discussing the rate structure and what we felt like was acceptable.

Yeah and we voted on it um shortly thereafter and I think that we are at the rate we're at because that's what we felt like was acceptable.

Yeah I know I looked at it last night and uh and saw where we made the decision.

Yeah so 348 a CCF that that was three to three so that didn't pass and then the 568 CCF that was a one to five vote.

One in favor five against so neither one of them passed so it defaulted to 875.

Right okay so um I so what are we what are we talking about from a penalty perspective?

So we're we're a hundred so we we we 360 is the rate is or 360 is the proposed rate not saying that's going to pass but 360 is the rate going forward the past due balance is 141 thousand based on that 360 rate what are we talking penalties?

What's the proposal here?

And and the proposal is to waive any penalties on the outstanding balance.

Okay.

And so if and when something comes to the board those are the three things that we'll have to decide.

Yes.

Okay.

Okay.

Director Kemp and then correct uh director savage thank you mayor so for administration here map this out for us because currently they're gonna say they can't pay the current rate more bill debt is going to pass to is going to rack up more delinquency will rack up.

Where does this go next if if the board if this board took no action or could not pass decisive action to negotiate or compromise what does it do I mean are we truly going to turn off our coma's water I mean so I guess my question is does the state of Oklahoma kick in or could you map out for us if they want to spin this up and continue and can't find resolution where does this go?

I think I think part of what you mentioned is where it goes I think if it gets to a point where um well first of all I mean our coma then has I mean when we when they agree to an agreement like this it has our our rates built into it and how we've addressed penalties and worked worked with them to get to an agreement then they have an obligation then to start paying their their bills and including their past due amounts and the that's uh they they need to have a rate adjustment on their side for their residents to make up for the obligations here and their other obligations to operate their system.

If they can't do that and then they would be much in the same place as they would be if if we didn't do anything right now.

I mean we still have a nine dollar and five cent rate which is our retail rate which is very unusual that we'd have a wholesale customer paying a retail rate but I mean I I understand the arguments about that I do but you know if we have a nine dollar and five cent rate which will increase in January by five percent it'll do it'll do those things that we've already put in place for our regular rates.

If it gets to the point where they don't pay or don't make themselves whole then we will have that I don't think we have and I'm you know I'm not I'm not playing our our our legal counsel here but I think it would be a very very tough thing to say that if if they're paying their water we have a wholesale water agreement with them if they're paying their obligations on their water contract how do we shut off their water contract their water what they're not doing is potentially paying their obligations on their sewer contract.

How do we shut off their water to make up for that sewer problem and how and then how do we continue to feed them water that they're paying for and then tell them that they that we're going to cut off the the wastewater outlet that doesn't make sense to me.

At some point the regulatory agency or the state agency would have to get involved and or and presumably a court system would have to get involved to tell all of us what to do.

Yeah I mean I I prefer some action what whether we can get to the three dollars and sixty cents I think charging a wholesale customer our retail rate doesn't make sense so I don't I'm not necessarily advocating I'm open to something of action but that just doesn't make sense I mean that I'm struggling to understand that but ultimately uh I think it sounds like there's due diligence to be had and that this comes back to another study session is that correct yes I would prefer that thank you yes because what we intend to do from from here is to finalize something to show you more definitively as to what that would look like.

Director Christina could say well Jeff I'm glad you brought up the regulatory agencies because that was my question.

I mean we're under a federal consent decree we're in no position to be subsidizing another city in another state so what what does the EPA think about this?

What does the DOJ think?

What is the ADEQ think?

I think that they would want us to show that we're the we're recovering our cost and at the moment we're not have you had this discussion with them not specifically is this on their radar that they have an opinion about what how we're treating our coma no I mean the the overall flow for our coma out of our complete out of our out of our system is what Lance one or two percent at the most I mean it is a very low part of the flow that we're dealing with overall.

Maybe it's one or two percent but it's hundreds of thousands of dollars.

Certainly is okay.

Nothing for me mayor okay.

Is there any further discussion I I think it would I think we probably need to ask that question of the EPA and the DOJ did you did you direct them to do that?

I think we should um just explain the situation get there I would I'd like to get their feedback can they would they give an opinion on something like that?

I mean I know we talked about it because when we were with the EPA in DC last year we were talking you know we were talking we talked a lot about water but we did bring up the fact that we had an a customer that um that was having challenges paying the sewer portion of their bill and you know as it relates to water and and things like that.

And so but I don't think we've we necessarily got any any direction on on how we would have and I I really don't think that we will I mean currently I mean the last thing that we had which I shared with the board last week is all the agencies have signed off on the modification it is being it's been lodged with the federal court we will have a we're in the middle of the 30 day comment period on the modification to our consent decree and at the end of that then presumably the federal federal judge will enter it as an order and so the in terms of how they the EPA or the department of justice consider how we're dealing with our coma they're not going to they're going to consider how we're meeting our obligations under our consent decree that we have with them we're they're not necessarily going to look at any individual part and how how we're recovering recovering our costs from a customer.

But they want to know that we're in a good financial position.

And if we're if we have customers we're not collecting from, I mean that makes a difference.

But the other thing is we're we are we are not ignoring it, we are still trying to find a resolution to that.

So there's nothing else.

We will go to second item on the agenda.

The next item on the agenda is discussion of the proposed agreement with Garver LLC for engineering services associated with the Mazard Water Reclamation Facility Improvements.

Project number 25-15-81.

This item was introduced at the May 19th regular meeting, and the board tabled the item pending study session discussion.

We'll further discuss this item, and we also have representatives from Garver and Hawkins and Weir present for questions.

Thank you, Jeff.

This agreement was tabled at the May 19th board meeting and added to this study session.

And Garver has was asked to provide more detailed task list with estimated hours for review and discussion.

Attached as an updated agreement modified to the fixed to a fixed fee in lieu of a lump sum.

And due to Sal's file size constraints, pages 34 and 35 were contained containing heavily detailed hourly schedules, were left out of the packet online, but they are at Easels on the side, and you each have a section, and I can get those to whoever needs them.

There's approximately 41,800 hour person hours of engineering involved in this uh wastewater treatment plant upgrade.

So they are quite voluminous, and we could not fit them on a sheet that would that would work.

Uh so this agreement is still in not to exceed eight point five seven five million dollars without written approval of the approval of the owner.

Garver will be paid based on a percentage of tasks completed based on hourly rates included in the schedule and agreement on the sides, and everybody can look at those that would like to.

Uh at times Garber will have approximately 45 to 50 staff members, mostly engineers working on this project simultaneously.

These hours are noted in the document.

We realize this is not feed up feasible for one or two engineers to work the estimated number of hours required.

The number of staff they have to dedicate to this project is a considerable benefit to using such a large large firm as GARBER and in their subconsultants of Hawkins Hawkins Weir.

In addition to their specific knowledge of Fort Smith's system, uh normal design costs this estimate, even with that advanced knowledge would be approximately 10% of construction cost.

The estimated cost of construction is around 150 million dollars to upgrade this plant.

So that would put normal design cost that I would expect at around 15 million dollars.

Then coming in at 8.575 million dollars is approximately 5.6 to 6% of the estimated construction costs.

So uh it is my opinion that the city is getting a good value with this agreement.

This project will uh uh I will uh now address any questions you might have, and we also have as Jeff indicated Garver and Hawkins Weir and Lance to answer any specific questions.

Thank you.

Uh direct settle.

You can finish up.

I just wanted the mayor when you got done us and speaks.

So you can you have to.

Oh I was done.

If you're gonna add, um so we just got this today.

I mean, literally, I was trying to go through it in the last hour trying to go through it.

It's it's thought a lot here.

Uh my question is I see that um Garver's sub outsubbing out three million dollars to Hawkins Weir.

Is that so that's part of the initial design and the final design?

Is that correct?

Yeah, they work very closely together in their their local knowledge and especially of the pump station knowledge coming into the plant is invaluable.

What is your expectation?

What is the deliverables of this project when it's complete from this eight million dollars?

What is the deliverables that you expect to have when those eight million dollars are spent?

My expectations is a set of stamped plans and specifications and a project manual, meaning all the normal uh special provisions, et cetera, ready for the contractor to do work and in fact with this being a CMAR or a construction manager at risk project, I'm going to get a construction manager interviewed as soon as we possibly can once they have the pre-design done to a certain percentage.

So this five point eight point five seven five million will cover a turnkey design.

From the engineering and architectural design.

Yes, sir.

So we we are in the midst of trying to find an engineering firm to take over the consent decree, correct?

We for the program management of it, yes.

Okay, so would the how would this person integrate with this design fee here?

They will look they will work very closely with all of our consultants, including Garver on this project.

This being such a large project, they'll have somebody that can work with them every day if necessary.

By the way, we did get three submittals for the program management on Wednesday, and I looked at the the packages, they all look excellent, so we're looking forward to hiring one of them.

But notwithstanding, the program manager is going to look at all of our linear feet of pipe manholes needed and any other special projects needed on the consent decree and look at those as a whole.

So this will come into big play in that and Lance can also add to that.

Also, if he has anything to add, as I'm getting up.

Yeah, just stand up here with the not get up.

Yeah, that was my mistake for standing up.

Um how I see this actually working because I will be very involved.

The part about CMAR and um without going into a lecture because I know Mr.

Dangman would get on to me about it, is we are building parts that are already designed.

So they'll design and we'll build as we go.

So it's a quicker turnaround in building to reduce SSO, so therefore possible penalties from sewer overflows and come into compliance with the um CAO that we have with DEQ.

How the program manager for the CD would fit into this is a second set of eyes for the city as we look at different aspects of this project as we go into another design phase or another uh bid phase to get it, having them to review what we're seeing.

So again, it's a second set of eyes for the city.

What I'm hoping is is that this this firm we're gonna hire can utilize their resources and assets along with this and try to focus on value engineering out things, reducing the scope of the engineering fees, because eight million dollars, I know it's a percentage, I hate the percentage thing, it should be hours needed, hours to work.

I know it's an estimate not to exceed.

If it's cost more, it's on them, but if you use the engineering resources correctly, they can value engineer some things out.

So the design gets simpler, the cost of design goes down, the cost of the construction goes down.

And I will let you know, we've already looked at uh cutting stuff out value engineering before this was even discussed on the cost basis for the engineer because there were things like a secondary clarifier.

It's a nice to have, but not a needed at this time.

So are we gonna pay this as they go?

In other words, they're gonna say here's the bill of hours for the month of June, here's the bill of ours for months of July, pay monthly as you go.

Well, I got a yes.

I've got a yes.

Um I I have not been in on that conversation.

I saw it a different way, but that if that's so we're not we're not gonna put up a bunch of money at the front, we're just gonna say this is what they did for this.

Yeah, this is this is not a here's a bag of cash to design this.

There is going to they're going to have to deliver before they get paid.

Milestones and the pay.

Exactly.

Milestones is the main thing.

All right.

So the question I have will turn to my colleagues for more questions.

And specifically, uh, our section 5.1.1 for basic services, the owner shall pay the engineer for basic services rendered under section one, except as amended and supplemented by exhibit A scope of services, a fixed fee amount equal to the cumulative hours charged to the project for each class of engineer employee multiplied by the engineers' hourly rates as shown in exhibit B, et cetera, et cetera.

So it is a fixed fee based on cumulative hours worked, and those will come through my office, and I will not approve something they have not done or pay for something they have not done.

Thank you.

Thank you, Mayor.

Todd, uh just simple simple thoughts for me.

When we talked about the not to exceed fixed fee, in the meeting, it did seem as if they were going to bill that amount that that is a guaranteed payment to the firm.

But when I hear you're talking about it, it's it's a bill up to those hours that they would be paid that.

Can you help me understand this?

Absolutely.

The scope of services in as described is 100% of the design.

So in order to get to that, they have a certain number of hours they estimate at this time.

So honestly, it's up to them if they can do it in 40,000 hours instead and they want to bill us less.

I'm gonna be great with that, but I want to get a good product, and I don't expect them to uh how this is I don't expect them to give it give us services for free.

So I want them to be paid for the work that they do, and this is a fair way to do it.

And we've had several contractors and consultants that don't use up the entire amount and they give us 100% and they don't bill it.

That's up to Garver.

I can't speak for them if they'd like to speak about uh specifics on this, but I see it the value of our scope being secured here and us not having an exceedable amount unless we throw a scope change at them.

If I want to say, hey, we're we want you to design for 12 million gallons per day, but next month I say we need you to go to 14 million gallons per day.

They deserve more money for that because we just completely changed what the plant capacity can handle.

So is it so is it fair to say that we're going to spend this money, but that you're holding it accountable that there are hours that will be billed along the way to make sure that that did indeed math to be that amount of money?

Yes, sir, and more important honestly, I can't I can't control, I can't watch all their workers doing all their hours.

I'm not gonna check all their time sheets at the end of the day.

There has there's a certain number number of good faith and trust that we have to have that I have with all of our consultants.

But I'm confident that we need the I know that we need the product that we need, and in order to get that, I know we're getting a value for this, because I'm I'm with you director settle on the the percentage thing too, but seeing a fifteen million dollars going down to eight and a half, I was quite pleased at this.

But uh I I would like maybe Garver to uh explain a little bit of their philosophy there, they may or they may not need that entire amount.

Well, the other question it would be great, I'd love that.

Welcome that.

Uh yes, if you could, and I guess the other question why he's coming is uh you know why this approach versus the billable hours approach, and I think the concern when we had talked after the meeting was that this is benefiting the city.

Uh, but you know, it sounds like they're missing out on millions doing this approach.

So maybe they can give greater clarity to this.

Absolutely, and I'll start and then I'm gonna hand it over to Jerry.

But there is a certain amount of risk doing a construction manager at risk.

There's in the value engineering part, there is gonna be some duplicated design effort that I like to I would I I was pleased to capture in this fixed fee because that puts an uh makes an unknown known to me.

So I was pleased that with even in their interview, they presented some value engineering items that saved several million dollars up to nine million dollars that we saved just in their interview for this.

One of the reasons why I voted to uh award this to them, but with having a fixed fee not to exceed maximum, if there's issues with permitting that they need to spend extra hours on, it's covered.

If there's extra geotechnical, which I already know some projects around the state have had geotech costs of way above what they estimate here, but we can lock those in and not have to pay the bill higher at a later time unless we change the scope.

But Jerry, I'd love to see you have uh your ticket.

Absolutely, sir.

So one area that I've already found because I went through the spreadsheet line item by line item today, and I actually noticed some stuff and I called Jerry and asked hey, where is your cost?

Where's the fee associated with the ADH review?

They forgot it, they're eating it because they gave us a guaranteed amount.

So we've already saved money because they're not going to be billing us for that.

Um permitt for the second line that has to go out to um the the river.

I think there's uh about two and a half million, two to three million in there.

Uh Mountain Home put in a very simple intake structure.

Or 200, or two hundred thousand, sorry.

Sorry, yeah.

200, two hundred thousand, not two million.

My apologies.

Put in a very simple intake structure, it costs them 200,000.

We're going to have to be dealing with the core of Engineers.

We're going to be dealing with federal register.

So this can be you can have somebody in the state of Washington make a comment on our project here in Arkansas, and we're going to have to address it.

And all of that is wrapped into this cost.

I think they actually there's areas in this, I really feel with my knowledge, they underestimated the hours.

I'm grateful for it.

I really am because not to exceed means we're getting work done for free.

But I did want to point out out at least one area that I've already seen where they due to an error, and when I brought it up, Jerry said, we gave you this amount, that's the amount we're standing by.

So Jerry.

So on the fee proposal.

So we actually based all this that wasn't on a percent of construction kind of laid out plan or anything because the percent of construction can change based upon you know the contractor who we're working with, where they're getting the supplies from.

As Lance and Todd have already mentioned, we did a lot of value engineering throughout the earlier process of this.

So originally, if you take the 2021 cost, 2022 cost, and you escalate on today, it's 185 million.

We know y'all can't afford that right now.

So we've already been looking at that process and what happens with that, and able to tailor that back down to where we had in the budget and had in the bond program where we kind of worked on it, kind of brought that into it and everything.

So as Todd had mentioned there, yeah, we probably did leave some money on the table.

That guess what?

That's that's on me at the end of the day.

We still got a job that we have to do.

We still have something that we have to deliver to you for the price that we gave you on that project.

Um, these hours that you see in this spreadsheet, this was something that was developed.

Um, we started this, I think Lance in November December originally, and then it went back to the RFQ process.

They wanted to make sure the RFQ process was adequately done, and so we kind of put everything on pause.

We came back, revisited it with it, brought Hawkins Weirs numbers in as well.

And so all these numbers that you see on here.

I mean, it's not a pencil whipped percentage, though it on there and then make it up.

Todd and Todd and Lance asked me this on Wednesday following the meeting.

I had it to them within an hour or so, even the middle of some of my travel, I was in the middle of.

So, I mean, this is something that we already had.

As far as the costs go overall, um, I'm kind of regretting a little bit now.

Maybe for to Todd's point, I should have bumped the number up, but y'all are getting what you're you're getting on there.

Um I think the value is gonna be there.

Yeah, I'm gonna be honest.

We're probably gonna put every bit of this in there, and honestly, to Lance's point, some of these sections we probably undershot just because once you start getting into it, everybody kind of starts poking.

A lot of people start kind of making commentary or asking questions during the public meetings that we have to do for the environmental permitting.

There's gonna be some of those that have to take place because we're dealing with the Corps of Engineers Park.

We're going through Spring Hill Park, and then we're putting something into the navigable channel of the Arkansas River.

So some of that's you know, we did it based off of what we've seen on similar projects, based off what we've seen on other areas, similar designs of what we've done through throughout not only Arkansas, but also across our our footprint.

And so I'm really hoping that we're we're gonna be okay at the end of the project.

Um, listen to Todd and Lance.

I think we might be a little under, but I think we're gonna end up where we're gonna kind of be right there with those numbers.

Thank you for your time.

Yes, uh, thank you, Todd or or uh Todd.

When would we expect to have a Gantt chart of timelines for all the uh for the milestones on this to be completed?

Um, if we approve this next Tuesday, how long till we get a Gantt chart to say here's the deliverable milestones, and this is where we're gonna meet it at.

What do you think, Jerry?

Probably a couple months.

Um, are you settled?

The Gantt chart for the design process just a hand chart for those eight million dollars with I mean, I mean it's gonna take some time to develop it all, but I mean, I'm already had to be on that one.

Um, we had actually during our interview, and I'm actually referencing here.

This is the interview document that we had.

Okay.

Um we'd we proposed a very aggressive schedule for this project.

Okay.

Um, I don't know if y'all have y'all probably don't have this tonight.

This is something that we've already provided to Lance, Todd, and city staff.

Um, we laid out our design phases, we laid out a notice proceed date, which currently we're we're still in line with that.

We laid out the estimated time for surveys, geotechnical studies, design, permitting.

We're gonna aid in.

So, one thing that they have not mentioned is we're actually gonna help y'all since CMAR's kind of a newer process for the city of Fort Smith.

We actually have it in here and budgeted in here to help you through that entire process.

This is something we're very common commonly working with across the state.

So we're gonna help write the RFQ for you to make sure it's it's compliant, help you go through that process.

We will not interview that is on the city of Fort Smith to provide the interviews and do their selection, but we'll make sure that we're providing all those services to help you along with that process.

So that's all documented in the schedule that we already have to get you into compliance by the CAO date at the end of 2028.

Okay.

So the staff, Jeff, team, if you can supply.

I'd like to see that, again, chart to this to the board.

That's all.

Thank you.

Yes.

Thank you.

Well, the other questions from the board.

Okay.

Thank you.

If not, we will go to the can we get a motion to put this back next week's agenda.

We need a motion, second to put this on the agenda for next week.

Make a motion, we add to the next week's agenda.

Second, thank you.

Okay, thank you.

The uh the next item this evening is a discussion regarding the city's policy regarding injury leave for city employees injured on the job as requested at the May 19 regular meeting, specifically in light of a police officer recently injured.

Director of human resources, Eric Garvin will review our current policies and address any questions from the board.

Thank you.

Uh, question that came up last week as it relates to injury pay for injured employees.

And so I in the memo, I kind of outlined uh exactly how that works.

Uh and the first 30 days for any employee, uniform, non-uniform, uh, the city already provides injury pay.

So they receive their regular wages uh for that first 30 days, and then after that, in the case of specifically the one that was asked about, uh, there'll probably be some type of investigation phase, and so that individual will be placed on paid administrative leave, and then pending that after that point, uh, if they're still unable to work, then they would go on to normal workers' compensation.

Uh, and the workers' comp pay would cover their first sixty-six percent of their uh normal wages, and then after that uh they can supplement that with additional uh accruals such as vacation time, sick time, that type of thing, uh, after that point.

Uh, and then for any other type of injury uh like a back strain or a shoulder injury, that type of thing, the only difference would be is that administrative time.

So there wouldn't be that.

They would still have their first 30 days uh would be receive that paid injury leave, and then after that point, they would receive workers' compensation benefits that would cover that 66% of earnings, and then after that point, if they so chose, they could also use additional accruals to cover that difference and cover that 100%.

And so with that, I'll answer any questions anyone may have.

Director Kemp and then Director Josh Gassavage and Director Settle.

Thank you, Mayor.

And thank you for being here, Eric, too, to answer these questions.

You know, for me, I still struggle because it sounds as if there's a point where it gets to he's using.

I'm just talking specifically to now to Officer Newton, because that's what kind of triggered me to think about this.

Sure.

And I had a conversation with Chief Baker about this, and that led me to think and ask questions about this.

But you know, if you have an officer shot in the line of duty or a firefighter that uh roof caved in because of some fire burn they were trying to save someone's life.

I'm not comfortable personally with ever asking them to use personal and crew time.

Um, you know, is there some is there other cities that continue on uh in different views and practices than we do?

I just it feels odd to me to ever ask him to utilize any accrued sick days over this in regard in regards to the incident, sure.

I'd have to look into your question on how other municipalities handle uh similar things.

We did have uh workplace injury here three years ago, I believe, that was very similar, where an officer was injured.

Uh to give you an idea of that second point there, as far as the investigation goes, that took almost four months after the 30 days, and by the time that was completed, uh he was able to return back to work uh and and was no longer uh you know on any type of work restriction or anything like that.

And so this would this practice would apply for you know any type of injury that was of a severe nature uh where someone's critically injured and you know in the in this case having to be hospitalized for multiple days as a result of a workplace injury I have a few thoughts and listen to my colleagues but to me there's a difference between investigation and critical injury that that's to me two different things that I think as I think through this.

The other thing that as I think through this is there's a probably a difference of is this employee looking to come back to work and establishing a reasonable time period for such as that and or is this person not going to be able to return back to work and all those will have to be handled I'm sure in a case by case but can be a policy be written that allowed up until a time determined by professional standards that if this person's coming back even if it is a long time that the pay continues with no no uh no re no retention of their or or full retention of their sick leave and that this is just hazard pay for the job that they do.

I would I'd like to see and entertain a policy like that.

And then if there is some time period that uh that seems extensive that determining that then decide that seems more like a workman's comp settlement sort of issue but if if someone's able to return back to work but they need four to five months or whatever that looks like I just don't see why we would penalize or take away any sick leave days at all during that time period.

Thank you.

Director Josh Sanders tell me the time frame again when he could start working um uh workman's comp, drawing workman's comm uh well no the workers' comp wouldn't kick in in this particular case if you're talking about an officer Newman's case until after the investigation was completed and there's no time frame.

What's timeline on investigation?

I couldn't tell you that that would be an a question for what's the investigation.

I have no idea that we we have had cases in the past where an officer was injured and they were investigating the circumstances surrounding that and that's a conversation for the police department on how those investigations are done and what that timeline looks like.

Well I'm saying the man's been shot I don't have there there's nothing investigate there correct I don't know I don't know I all I know is this is that what I'm telling you is this is the policy and procedure that we've had in place for many years now and this isn't the first case of an interesting injured well I don't disagree that there's definitely a conversation that can be had on that.

But this man's looking at two probably three four years recovery for sure and he's gonna live on 66% of a salary with a wife and two little kids.

I mean that's that's the way it's it's set out so this board wants to change something we can definitely do that.

I'm not saying we're going to do something.

Okay, I think the board is in agreement that this needs to be changed.

This isn't right.

It's not like the you know the guy had a heart attack or kidney failure.

I mean this is this is I mean he almost lost his life no I mean I wholeheartedly agree that that what this policy is set for isn't it for what you're talking about this policy for somebody to get shot it sucks.

And again this policy is not designed for someone who is critically injured and well why won't we design one for that?

Well we definitely can if this board would like to would you work on that and what is I definitely can thank you very much.

I think you're I think Eric for explain this to us to us.

I I think I can try and I have to get with administration but I think we it's it's a matter of again I just like I was telling Director Martin it's a matter of adding a caveat that directly addresses what Director George could have is talked about and to identify what that type of critical injury is to an employee and just do a caveat to the existing policy.

So we can still keep the 30 days that exists to cover things like someone has a shoulder strain and they're off and they have to go to doctor's appointments and follow-ups and still have those things covered just like we always have and then address these critical type injuries that honestly don't come up thankfully that often uh but they have in the past and uh you know addressing and identifying exactly what the criteria is for that I think we can we can do that fairly easily and we I can probably try and have it for next week or the the meeting after that for sure.

I'd like to have this voted on before the end of June.

Okay.

Thank you, Director Kemp.

Thank you, Mayor.

Um one other thought I have is as I'm sitting here listening to our conversations is you know once again, since we're targeting a hazardous situation involving like gunfire or something that they were doing in their line of service that was hazardous to their life.

I do wonder should this include in a weird times that we live in, non-uniformed employees, meaning let's say a uh uh neighborhood services guy approaches a yard and then is shot in the front yard.

That's a hazardous situation that still should be included in this just as much as a uniform, or a city worker that was out there fixing a hole in the ground, and somebody thought it was humorous to take a human life or try to.

I mean, just because they're not a uniformed employee, I think a hazardous situation is the policy that I think should be reviewed here, and probably should be inclusive of any city employee that is treated in such a manner in service of their job.

Wholeheartedly agree, yes.

Any policy we write, we're gonna write for an entire city, uh, not specifically for one grouping of employees.

Thank you.

Any other comments from the board?

Okay.

Thank you.

Uh with this item four review of the preliminary agenda.

Yeah, Mayor.

I'm sorry, Under, go ahead.

I mean, yeah.

If we could have two directors to place it on a future meeting.

So moved.

Okay.

Yeah.

Uh Mayor.

Um I need to say so.

Jeff, um, add it to the water park.

There's a forklift that's been sitting there for months and years.

Do you know what that who's playing for that?

It does not belong to us.

This is belong to us.

It belongs to CSM Waterworks, uh, the company that's that we have contracted to put the the slides together.

And they just left it.

It is it is an operable, so yes, they they have plans to dispose of it when they come back.

Okay, thank you.

Anything else to come forward?

Motion to adjourn.

So moved.

Thank you.