Fort Smith water surcharge one idea in crafting data center development rules
Fort Smith city officials are considering new rules, including a potential water surcharge, to deter data center construction. The Fort Smith Board of Directors tasked staff with crafting amendments to existing zoning and water use regulations to make it difficult for data centers to operate in the city, despite a state law that prevents outright bans. These discussions come amidst nationwide concerns over data center impacts and recent actions by other Arkansas cities to adopt stricter rules.
The Fort Smith Board of Directors is taking steps to create new regulations to discourage data center development within the city and surrounding metro area. During a recent study session, board members, including Director Kevin Settle and Director Christina Catsavis, instructed city staff to draft amendments to existing rules concerning water use, zoning, and other areas, with Catsavis explicitly stating the goal is to "make it as difficult as possible" for data centers to be built. Director Settle specifically requested a water surcharge for data centers, proposing a rate four times higher than the current structure.
Deputy Fort Smith City Administrator Maggie Rice indicated staff are exploring options for new regulations, such as public utility capacity certifications, water usage reports, enhanced setbacks, and noise limitations. Acting City Administrator Jeff Dingman added that staff are working on a standardized agreement for wholesale water users that would require Board approval for larger water connections, a measure aimed at controlling regional water supply usage.
The city's actions come despite Arkansas Act 851 of 2023, signed by Gov. Sarah Sanders, which prevents local governments from outright banning data center development but allows for rules that create delays or significant restrictions. Other Arkansas cities, including Fayetteville and Little Rock, have already adopted more stringent data center development rules. Arkansas Rep. Aaron Pilkington, executive director of the Arkansas Connected Communities Association, urged Fort Smith officials to engage thoughtfully and base rules on "informed engagement, not assumption," offering to arrange site visits to existing data centers to demonstrate mitigation measures for water, noise, and utility integration.