I have good news. I have bad news. Bad news? It's not yet Friday. The weekend isn't tomorrow. Good news is Michael Tilley is with us a day early from Talk Business & Politics. Welcome to a Thursday edition, Michael.
Michael Tilley: Well, thanks for having me. I'm not sure I can tell you what day of the week it is. I've been geeking out on this Artemis mission to the moon every day. It’s a wonder if I've done any journalism this week. We'll see if this is much of a report or not.
Kyle Kellams: Well, we know you have because there is evidence at talkbusiness.net. We talked about the changes in hospital availabilities in the Fort Smith metro last week. Going to do it again — this time for the second time in about a week. We're talking hospitals, this time Mercy Fort Smith. What's the latest?
Tilley: You remember last week after the Baptist Health news — which we'll get to — they put out a pretty lengthy press release saying, hey, we're here, we're healthy, no pun intended, and we're expanding and we can treat everybody. There are only two hospital systems in the city, Mercy and Baptist Health. Baptist used to be Sparks. A lot of people know it as Sparks, but the rumors and the reports — they're closing their labor and delivery services, they're closing their obstetrics and maybe some other things. They say they don't call it closing, they call it they're in transition. So it's got a lot of people nervous. Mercy put out a press release this week saying that they're going to invest $60 million in new services and new facilities over the next three years. And they said a lot in their press release, but they didn't say a lot, if that makes sense. They didn't provide details. They just said we're going to expand services, upgrade facilities, enhance technology, we're going to have more caregivers, we're going to increase access for patients. They use a lot of that type of language, but didn't really — new laboratory imaging, preventive care, update patient rooms — but they didn't really talk about the details of what that looks like, how much of that will happen, where it will happen. Are we just talking more people, more facilities, renovating the existing facilities? So we don't know. Mercy said that as they begin to move through this three-phase process, they'll provide more details. And workforce will be the key. They talked about the need to hire more doctors. That's a big question. I don't think I have to tell your smart audience that it's difficult for hospital systems and clinics to hire the nurses they need, the doctors and the other — the imaging specialists. That's been a challenge for hospitals around the country. So that will be, I'm sure, a challenge, and hopefully they can make that happen.
Kellams: Some transportation infrastructure appears to finally be getting the green light to expand. That's the Slackwater Harbor. That's around Van Buren. Several barges at once when this is completed will be able to unload.
Tilley: Yes. And they'll be off the channel, so it's a safety issue. It was November 2023 when we learned that the Department of Transportation, their maritime administration group — MARAD for short — granted a little over $15 million. Five Rivers Distribution, which operates the port there in Van Buren and the port of Fort Smith, they're going to put about just under $4 million into it. So it's a $19 million project. When I first heard of a slackwater harbor, I thought, what the hell is that? Is that just a place where the water is — like a little pond where the water doesn't run? But it's not. It's a pretty complex piece of infrastructure. This slackwater harbor will be cut out of the main channel there on the Van Buren side of the river, will be 1,000 feet long, 200 feet wide, can hold up to eight barges at a time, have 2,000 feet of dock frontage, have a large concrete pad for mobile cranes. This is a critical part of the infrastructure. And it's not the end of it. I talked to Ashley Harris, she's assistant executive director of the Western Arkansas Planning and Development District. They're the parent agency for the Western Arkansas Intermodal Authority, where the grant money is going through. I also talked to Marty Shell. He's the head of Five Rivers. This is part of an overall plan to build out more of what's called a multi-modal facility where you can handle barge traffic, rail traffic coming in, truck traffic coming in. You can move cargo off and on all those different pieces of transportation. Marty talked about — I asked him if this was going to be a benefit, and he said yeah, it'll be an immediate benefit in some ways, but it'll be a longer-term benefit when, for example, I-49 is completed through Arkansas and you've got an I-40/I-49 cross section, you've got the river coming through, the rail assets are already here. And so when you get all that connected, that's when it'll really be important. And Marty had a good quote. He said the benefit may be seen in the next generation. He said, "I may be dead and gone, but the next generation will enjoy it." It's not a Slackwater Harbor in a headline that brings a lot of people in to read, and it's not exciting and glamorous, but from that fundamental economic standpoint of any regional economy, having these kinds of infrastructure pieces is very important.
Kellams: Well, if Slackwater Harbor doesn't seem sexy to the ears, how about water meters?
Tilley: Yeah, your ratings for this show are going to be off the charts. So we have been doing this series on the Fort Smith water system, which is in need of some pretty significant repairs. The city hasn't been maintaining the system like it should over the years, and so it's kind of starting to fall apart. The city needs new transmission lines, distribution lines within the city. But in covering this and looking at all of these big-ticket items and more — the high-profile items, digging under the Arkansas River for a water transmission line — in doing these interviews with engineers and others, we kept coming back around to this concept of, do we know what we're using? Do we know what amount of water we're using? There's a saying in business that if you can't measure it, you can't manage it. Water meters are part of what the issue is in Fort Smith. There's a lot of water going through the system that the city is not able to account for, and if it can't account for it, it's not generating revenue. Non-revenue water in 2019 was about 25%. That means of the 100% of the water they sent out of their water treatment plants, they're only getting paid for 75% of it. The unaccounted-for water rose to 36% in 2025. The best way to think about that is: can you imagine if Walmart put out a quarterly report and said, hey, we can't account for 36% of the inventory we put on the shelves?
Kellams: Yeah, that'd be bad.
Tilley: As I've talked to these folks — Jimmy Johnson, he's the deputy director of engineering — when I was asking him where the weak points are in the system, he immediately said, "Meters are our cash register and our cash registers are not working properly." Lance McAvoy, he's the city's director of utilities, talked about roughly 33% of water meters in the city system being 20 years or older. The question is how do you fix that? And the answer is it takes money. It kind of becomes a vicious circle. You need more money to fix it, but if you're not generating the revenue you should be from the water you're producing, you don't have the money. Back to Jimmy Johnson — he suggested that a good plan may be for the city to just begin budgeting to replace 5,000 meters a year. They have roughly 40,000 meters total, so every eight years you fully replace the system, and you don't have to wait 15 or 20 years and then be hit with a huge capital cost if you're just doing it every year. The city generated a little over $38 million in water system revenue in 2025. If you just had a 5% gain in revenue through better meters, that's around $2 million a year, and that would more than fund that annual replacement cycle of 5,000 meters. So this is not an unknown. It will be interesting to learn if the board of directors — the city board of directors — has the political will to either raise water rates or take other actions to address the need for new water meters. They continue to be informed about why better meters are important, but they just can't seem to pull the trigger or take the recommended action.
Kellams: There's a merger of two of my favorite subjects — history and beer. If baseball could somehow get in the conversation, it'd be the trifecta. A new fundraiser for the Fort Smith Museum of History: Brews on the Border.
Tilley: You're right. It's a new, unique event. It's about learning history, it's about having a good time with a large group of people and drinking beer, which I think are things I may have done in college, but maybe not in that order. But it's not stopping the Fort Smith Museum of History. They're going to pull together this event set for July 25. There'll be more than 25 vendors there — beer, seltzers, wine, non-alcoholic drinks. All three floors will be open. There'll be live music, special museum exhibits, food trucks. VIP tickets are $100. Regular tickets are $50. Museum officials we talked to said they expect about 300 to 500 attendees for this inaugural event. And they're not just doing it for grants, although it is a great public awareness event. The museum began in June of last year work on significant renovations. This first phase is about $1.6 million. They're replacing windows and doing other exterior work. They're going to replace the elevator that was, I think, installed in 1982. Then the second phase will be new heat and air systems and other possible exhibit work. It's a great museum. It was like the Marshals Museum — just a pleasant surprise when you go through it. You just don't expect that level of information about the city's history, the region's history, frankly. I hope they have good success with this event. And I've already got my tickets.
Kellams: All right. I'll see you there. Michael Tilley, you can see everything we've talked about at talkbusiness.net. We'll return to Friday next week, Michael.
Tilley: All right. Sounds good. Thanks.
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