City to see possible 58% sewer rate increase if sales tax vote fails
The sales tax extensions, if passed, would collect money for the police and fire departments as well as parks and consent decree projects.
More: Elections in Fort Smith ahead May 24
The city will run out of money to pay for consent decree projects in late 2022 or early 2023 if people do not pass the tax extension. After that, the city would have no money to put toward consent decree projects, Director Lavon Morton said.
The sales tax extension would collect $16.5 million per year for consent decree projects, City Administrator Carl Geffken said. Voters will decide whether to pass the extension May 24.
“Without the sales tax the board of directors is going to be faced by increasing rates on sewer rates," Morton said. He later said, “the directors don’t have any alternatives."
If voters choose not to pass the extension, the board of directors will likely be forced to raise sewer rates by 58%. The city of Fort Smith is legally bound to continue consent decree projects. If they did not, the federal government would fine the city $12,000 a day, Morton said.
In the case that the sales tax extension passes, the city would put a three-year freeze on sewer rates, mandating that sewer rates would not go up during that time. On top of that, for the next five years, at the most, sewer rates would increase by 3.5%.
In 2015, 2016 and 2017, the board of directors increased sewer rates by more than 150%. So the possible 58% increase would be stacked on top of that.
The first of the taxes goes toward parks capital improvement projects and the Fort Smith Fire Department. The extension is one-fourth of a 1% tax. Half of the tax goes to the fire department and half goes to parks and recreation capital improvement projects.
The second will go toward the Fort Smith Police Department and consent decree projects. The extension is a three-fourths of a 1% tax, and 83% of the collections will be used for consent decree purposes, and 17% will be collected for the police department. This tax was previously used to pay off city bonds.
Because the sales taxes are renewals of previous taxes, people will continue to pay the same amount of taxes when they make purchases in Fort Smith.
“Their bill at the restaurant will be the same the day before and the day after the sales tax," Morton said.
Morton also pointed out that about half of the sales tax money comes from people who do not live in Fort Smith. But Fort Smith residents would be exclusively responsible for a sewer rate increase.
Morton is a director over Ward 3, and he said many of his constituents live off of social security and would be unable to pay an additional sewer rate increase.
The sales tax extension that covers the Fort Smith Fire Department pays for the ongoing operations of Fire Station 11 along with the salaries of 20 firefighters and new fire trucks, Geffken said.
The Fort Smith Fire Department has an ISO ranking of 1, the highest possible ranking. Having a fire department with an ISO ranking of 1 leads to lower insurance rates.
Morton has met with many community leaders about why passing the sales tax extensions is important. He encourages anyone who has questions to give him a call at 479-461-2643.
Alex Gladden is a University of Arkansas graduate. She previously reported for the Arkansas Democrat-Gazette and The Jonesboro Sun before joining the Times Record. She can be contacted at agladden@swtimes.com.
This article originally appeared on Fort Smith Times Record: City to see possible 58% sewer rate increase if sales tax vote fails
