Michael Tilley with Talk Business and Politics joins Ozarks at Large's Kyle Kellams to discuss a water infrastructure crisis in Fort Smith, contamination monitoring at the former Whirlpool site, declining tourism numbers, and the city's strategic planning session.
Kyle Kellams: Here is a topic not unfamiliar to people who listen to our segment: water in Fort Smith. We’re talking about $585 million for some water treatment upgrades.
Michael Tilley: Yeah, that’s the high end. So remember when the folks in Fort Smith passed the sales tax changes in May to address the big consent decree funding? And we thought we were finished with big-ticket infrastructure issues. Remember those days?
Kellams: Yep. I do.
Tilley: But we weren’t quite through with those big-ticket issues. So this week, Lance McAvoy, the utilities director — and these aren’t surprises, the board knew, most citizens knew — that we had some water infrastructure issues we had to deal with. But really, for the first time, city staff put a number on those and framed it up to begin trying to address. The range is anywhere from $320 million to around $550 million to $600 million. Of course, that can change — construction costs change all the time. The key issues are upgrades to Fort Smith’s water treatment operations and to complete this 48-inch water transmission line between Lake Fort Smith and the city of Fort Smith. It’s about 34 miles. Remember, Lake Fort Smith is there in the northern part of Crawford County. We’re talking about infrastructure built in the 1930s, 1950s, 1960s. There have been upgrades and renovations since then, but the underlying infrastructure is old. Think about this: no person working on some of those initial projects would have ever heard of a guy named Neil Armstrong. That’s how far back some of this work is. The water transmission line is needed because right now there are just two lines coming into the city. They’re old, and they’re both limited in how much water capacity they can bring in. For example, you could increase the water treatment capacity at Lake Fort Smith, but if you can’t pump any more water through the lines, you’ve not really done yourself any favors. That new line would also provide redundancy coming through the south part of the city, near where the I-49 bridge is coming in, north of Barling. It would service a lot of the east-south part of the city where a lot of growth is taking place.That’s a $150 million to $225 million project.
Kellams: Whew.
Tilley: Yes. The Lake Fort Smith treatment plant to update that boosts the whole project again up to that $325 million to around $600 million cost. The city only has roughly $15 million, which will just help them complete the first six miles of that transmission line. They have no source of revenue for the rest of that big ticket cost. McAvoy said if all the money was available for both the transmission line and treatment plant, work would take six to eight years to complete. But they don’t. That was part of the frustration Tuesday when the city board heard this. They’d just made tough decisions about the consent decree, and now this is in their lap. They weren't happy at all. They weren’t upset with Lance — it's not his fault, he’s just bringing the reality. Now they’ve got to figure out how to get grants. Are they going to have to raise water rates, which they probably will? Can they get federal or state support to build this through? And, of course, this prison in Franklin County near Charleston that Gov. Sanders is trying to push — she’s hinted she’d like some water for it from Fort Smith. There’s talk about, well, if you want water, you need to help us pay for it. We'll see where that is going but this is going to be the next big thing. And this is hopefully the city board and city staff will find a way to fund this, that this isn't something, you know, a lot of people talk about needs and wants. You know, we'd want more parks. It’s not a want. It’s a need. Infrastructure is getting old. We just had that 24-inch main line blow up in Fort Smith a couple of weeks ago, and we had to have water conservation measures.
Kellams: Right.
Tilley: You can either invest in fixing it or you’re going to start having problems, or ultimately it will limit how much growth you can have in the region. Just a little editorializing: this is as significant to the city’s future as the consent decree. I think this is going to be the next big issue. We'll be following for a while.
Kellams: And of course, Fort Smith isn’t the only city facing this issue of aging infrastructure, especially carrying water and sewer. I mean, other cities are dealing with this as well, not just the state.
Tilley: I did a quick Google search, and there are communities around regions around the country that have either no water supply or aging infrastructure or both.
Kellams: Let’s talk about some water legacy from the past. ADEQ, the Arkansas Department of Environmental Quality, is asking an engineering firm to add more cancer-causing chemical monitoring wells around where Whirlpool once was.
Tilley: Yeah, you’re right. Whirlpool abandoned that plant, and when they did, we discovered — not because Whirlpool admitted it, I won't go into how, but both there were local folks that were saying, 'Hey, your water's is polluted, you polluted the water'. And finally, the Arkansas Department of Environmental Quality caught on and forced Whirlpool to fix it. Well, part of that is that every year, this engineering firm that Whirlpool hires puts out a report and says, 'Here's what we're doing to monitor it'. The last report concluded, quote, ‘There is no unacceptable risk to human health or the environment.’ Well, ADEQ said, 'Wait a minute, not so fast'.
Kellams: Right.
Tilley: They pointed out four key areas, there were other things but four key areas. They talked about South Plume, that the numbers that this engineering firm reported showed an increase. So they said you need a new monitoring well there. The East Plume — back up just a little bit, it’s called TCE. I’m not going to try to say the name, but it is a known carcinogen. It’s a bad, bad chemical. And it’s in the water and underground around that plant. So essentially ADEQ said, look, we’re going to need three or four more wells to monitor these plumes also. The engineering firm in the report said, look, we’re not seeing any issues with what are called chemicals of concern in our indoor air screening testing. But in some of the numbers — you’d have to be an engineer to catch it — some of the numbers showed an increase. So ADEQ also said, hey, we want to know more. You need to give us a report back, and you need to do that in the next 30 days. We want to know more about these wells. So it’ll be interesting. That 30-day period I think comes up in mid- to late September. So ideally we’ll have some follow-up reporting then.
Kellams: Tourism numbers for the Fort Smith metro area for June have been released, down slightly. Do we make anything out of that?
Tilley: No, it’s not unusual. We’re seeing moderation overall in the state’s tourism sector. The city of Fort Smith’s hospitality tax revenue was down about 5.5 percent — around $624,000 — through June compared to the same period last year. In Van Buren, the numbers are down about 7 percent. Now, one of the things they’re up against is overall the state tourism economy was very healthy in 2024. In fact, part of that is contributed — we had that little solar eclipse thing, remember back in April 2024?
Kellams: I do remember that, yes.
Tilley: Yes. So for example, the state’s 2 percent tourism tax this April is down almost 14 percent compared to April 2024. So that gives you some idea. The 2 percent tax is not directly comparable to these hospitality tax revenue numbers, but it does provide a picture of the difference in tourism tax activity.
Kellams: There you go. Just hand out those glasses and get everybody together.”Finally, think about everything we’ve talked about: millions of dollars needed for infrastructure improvements, tax dollars. This is the backdrop for a strategy session for the Fort Smith City Board of Directors as they think about the budget process. So you always want to see an increase in the number. But if you’re posting a decline against a year like 2024 when the numbers are really robust, I wouldn’t be too alarmed about those numbers right now.
Kellams: Well, just tell the Chamber of Commerce to have another eclipse. I mean, it’s that easy.
Tilley: There you go. Yeah, just hand out those glasses and get everybody together.
Kellams: Finally, think about everything we’ve talked about: millions of dollars going to be needed for infrastructure improvements, tax dollars. This is a backdrop for a strategy session if you’re on the Fort Smith City Board of Directors and you’re thinking about the budgeting process.
Tilley: Yeah, they had a strategy session. It’s the first one in two years. The whole board, they gathered the entire day last Friday. There’s a lot, but let me button it up real quick. They essentially have these to identify strengths, weaknesses, opportunities and threats. It’s that old SWOT analysis, they call it. Strengths they identified were they’ve got this new growing military presence with the foreign pilot training center. They talked about the Arkansas Colleges of Health Education, the hospitals, the University of Arkansas-Fort Smith, the water supply. We do have a very good water supply, although we have some infrastructure issues related to it. Weaknesses they identified were, number one, aging infrastructure, lack of long-range planning, rates of regional poverty and some infill redevelopment policies. I think the overall vibe was that it’s kind of like, what’s those things, the good Lord giveth and the good Lord taketh away. Well, there’s a lot of good going on, but there are also a lot of things they need to address. For example, the major water issues we just discussed. They did outline some opportunities going forward that they’d like to address. They want to do more for riverfront development. Obviously infrastructure investment. And they talked about maybe having a longer-range plan so these $600 million budgets don’t sneak up on them. They talked about doing more in terms of marketing and economic development. They want to change the annual budgeting process, kind of get to, they even mentioned using more of a zero-based budgeting where you kind of start back from zero and say, okay, do we really just need these things, or are we just carrying them over from last year?And they also talked about reorganizing all the city’s utilities, engineering and streets department under a public works department. So that was interesting. It was a pretty aggressive list of priorities they wanted to pursue. As always, we’ll see what they do to make, what kind of progress, if any, they make on those points.
Kellams: You can read about all of this and much more at TalkBusiness.net, including an article from George Jared about the future of Arkansas agriculture. It's got an arresting, uh, visual component that goes, you know, that attracts your eye to the story. It's well worth reading.
Tilley: Yeah, $1.4 billion is an estimated loss this year. And that’s primarily for row crop farmers. I'm glad you identified it. It’s a great read. And it’s an alarming read.
Kellams: Michael Tilley, have a safe and hopefully relaxing holiday weekend. Talk to you next week.
Tilley: Yes sir. And go Hogs.
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