Possible city hall move mentioned at convention center meeting

The news at the meeting of the ad hoc committee charged to investigate convention center funding options was less about the convention center and more about a renewed study of the pros and cons of moving city offices to a three-floor “annex” of the convention center.

An 8-member ad hoc committee was recently appointed by the Fort Smith board of directors to consider and recommend funding and/or operations options for the Fort Smith Convention Center. The city faces a potential convention center operations loss of up to $1 million annually to the city budget as early as 2011.

During the committee’s Wednesday (May 5) meeting, City Administrator Dennis Kelly said he has asked the city’s Engineering Director Stan Snodgrass to begin a cost-benefit analysis of moving the about 80 employees from rented space in the Stephens Building on Garrison Avenue to the annex. The city pays about $193,000 a year in rent for the Stephens Building space, and Kelly estimated a move to the city-owned annex could potentially save up to $100,000 a year.

“I have more questions than answers on this,” Kelly said after the meeting when asked about the potential move.

He said numerous factors will have to be considered, including the upfront costs of moving phone systems, renovating the annex, parking and furniture. Deciding if the “what could be high” upfront costs justify the long-term will be important in the process, Kelly said.

Other than Kelly’s bombshell, the other focus of the meeting was the reluctance of Committee Chairman George Moschner to accept what he considered little savings from a proposed merger of the convention center and Fort Smith Convention & Visitors Bureau.

A report from the city showed that a combined operation in 2010 would have a $2.298 million operating budget, compared to a $2.481 million combined budget of the two groups operating separately. The report suggests a merger would save $119,700 a year.

“I would have thought there would be more cost savings,” Moschner, who is the chief financial officer for Fort Smith-based Baldor Electric Co., said during the meeting.

Moschner and Committee member Ben Shipley asked Frankie Hamilton, director of the Fort Smith Convention Center, and Claude Legris, executive director of the Fort Smith Convention & Visitors Bureau, to look again for areas to cut costs under a merged organization. Moschner encouraged them to look at flex time and staffing cuts.

The report on budgets under a merger showed no personnel cuts, with the five CVB employees and 13.5 convention center employees becoming 18.5 employees under the merged entity.

Legris defended the numbers, saying the CVB is “very diligent” in keeping costs low. He said the CVB handles its own media and public relations efforts rather than spend 2-3 times the cost with an advertising agency. Legris also pointed to figures showing that the CVB personnel costs as a percentage of budget are lower than those of Hot Springs and Pine Bluff — cities with comparable markets and operations.

Moschner was not persuaded.

“Until I’m proven wrong, I don’t accept that (low cost savings projection)," Moschner said.

Agenda items for the next meeting include the follow up report from Hamilton and Legris, a review from city attorney Jerry Canfield on the legal do’s and don’ts of merging the CVB and convention center and other revenue-producing opportunities for the convention center.

Members of the ad hoc committee are:
Tom Caldarera, restaurant owner
George McGill, businessman/insurance
Kevin Moran, Sparks Health System
Lavon Morton, ABF Freight System
George Moschner, Baldor Electric Co.
Craig Rivaldo, Arvest Bank
Ben Shipley, attorney