Chaffee Authority makes budget adjustments

story by Marla Cantrell
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Shale mining and property sales aren’t up to par at Chaffee Crossing. In fact, board member and financial committee chairman Bob Bradford said the two revenue makers are only bringing in about half of what was estimated in the 2010 budget.

These factors are showing up in the July numbers.

“Total income this month was $73,188,” Bradford said. “Total expenses were $131,136. We had a net loss, if you want to call it that, at least expenses exceeded income in the amount of $58,000. … Over the year, we have a net loss of $6,800. … Expenses are pretty much in line, in most cases, but the revenues are what’s short.”

Ivy Owen, executive director of the FCRA, explained why the Authority has only taken in $27,862 in July mining income.

“The contract that C. Watts and Sons, out of Oklahoma has on the southern end of I-49 was let in the fall of ’09,” Owen said. “Our revenue numbers were based on a contract we have with Watts that started January 1. The state issued the contract, signed it, and it rained and it rained and it rained. When they finally did get started, the shale that they were taking out, the highway wasn’t happy with the condition of the shale. They underestimated the amount of cut and fill they were going to have on the highway. They still haven’t issued a change order. … Here were are eight months in, and were eight months behind on income.”

Owen beleives the $1 million dollars in shale mining revenue will eventually arrive. But he did recommend trimming expenses in the $2.665 million budget by $300,000. The new budget cuts the lease income from $535,000 to $485,000, and added $100,000 in timber harvesting income. The new budget also increased insurance, demolition, capital expenditures, contract services, legal fees, and maintenance and repairs.

There is a significant decrease in the construction and development budget, which went from $750,000 to $235,000.

Judge David Hudson thinks the bigger problem is the way the Authority presents its budget. He believes there should be more than one budget, so the monies used for basic operations and salaries can be seen separately from capital expenditures.

“From my perspective, the key to effective budgeting when working with a board, is sometimes you have to dumb it down and make it more straightforward. How much money do you have and how are you going to allocate it,” Hudson said.

Owen said his staff will work on separating the budgets for next year.

In other business, Marc Lux, CPA, with Przybysz and Associates, reported the annual audit review showed the FCRA in a stellar light. In 2009, the Authority had $1,205,000 in cash assets, down only $2,000 from 2008.

Mitisubishi Power Systems is moving ahead on its $100 million wind turbine plant. The Japanese company has hired a Human Resources director, and opened its Fort Smith headquarters in the former Town Club on Garrison Avenue. The company has tentatively set a groundbreaking date for its wind turbine plant on Oct. 7.

Umarex USA, the air guns and rimfire manufacturer, is now operating out of its 100,000 square foot facility at Chaffee Crossing. Officials will hold a ribbon cutting sometime in October.

The board approved the sale of 2.1 acres, and two buildings to Rock Rodebush for $150,000, adopted uniform design guidelines for developers, and board member Janie Glover announced progress on plans to develop the historic district. She is working with a local author on a book on Chaffee Crossing’s history.

The next board meeting is Sept. 16.