Fort Smith Board approves ‘true up’ deal, sales tax election

“It’s time to move on.”

Those were City Director Kevin Settle’s words about the Van Buren true up controversy on Tuesday night (Jan. 3).

Settle’s fellow directors agreed with him, unanimously approving a settlement wherein the City will abandon its attempts to collect a 2009 water rate adjustment from Van Buren.

Earlier in the day, directors attended a special study session and listened to Fort Smith attorney Mark Moll, who outlined his opinion that any legal attempt to make Van Buren pay the 2009 true up would be unsuccessful.

So on Tuesday night, the question was whether to approve a settlement forged by City Administrator Ray Gosack and Van Buren water officials. The settlement is intended to resolve the 2009 true up, along with the money Van Buren has acknowledged it owes Fort Smith for 2006, ‘07, and ‘08.

Under the settlement, Fort Smith will no longer attempt to collect $253,000 from the 2009 true up. Van Buren owes $581,174 for the 2006-08 true ups, and it will pay $397,000 up front, with the remaining $184,174 to be paid in 12 monthly installments of $15,347 each. The last payment will be made in December 2012. Fort Smith will not charge Van Buren interest for the amount it owes.

Settle clarified that Van Buren has paid its bills in past years — about $17 million from 2006-10. The true up adjustments, he said, represent a small percentage of the whole bills. Calling Van Buren “a regional partner,” he said it was time for Fort Smith to acknowledge its mistake and move on.

City Director Philip Merry Jr., who has led the true up discussions in the past three regular meetings, asked Gosack to explain the city’s error in not calculating the true up.

Rehashing past statements, Gosack said City Finance Director Kara Bushkuhl told him that she was instructed by former City Administrator Dennis Kelly not to pursue the 2009 true up in August 2010, when it was due. She said that Kelly told her to delay the true up until the next year, Gosack reported.
Gosack said city staff has adopted a fourfold plan to ensure the true up failure does not happen in the future:
• The utility rate analyst position, which is responsible for calculating the true up, has been moved from the Finance Department to the Utilities Department. The city utilities director will monitor the analyst’s work to ensure that the true up calculation is sent to Van Buren in time each year.
• The deputy city administrator will also monitor the true up and verify that it has been sent to Van Buren within the 60-day period required by the contract.
• City staff will notify the Board of Directors upon delivering the true up calculation to Van Buren.
• The utility rate analyst position, which was left vacant in late 2010 as part of a hiring freeze, will not be part of future hiring freezes.

SALES TAX ELECTION
Directors voted unanimously to ask voters to approve extending a combined 1% sales tax to fund a variety of city needs.

Under the ordinances passed on Tuesday night by the Board, citizens will vote in a special election on March 13, where they will have several issues before them:
• Approval of refinancing current sales tax bonds ($55.3 million total). This issue must be passed in order for the second issue to pass.
• Approval of changing the current 1% sales tax to a three-quarter-cent sales tax for fire station improvements, wet weather sanitary sewer improvements, and water transmission system improvements. Voters will decide on whether to use bonds for each of these three areas separately.
• Approval of a quarter-cent sales tax to provide operating costs for the fire department and new projects for the Parks and Recreation Department. This tax has a 10-year sunset provision.

City resident David Harris said the sales tax rate could actually increase if voters reject the three-quarter-cent sales tax and approve the quarter-cent sales tax. That’s because if the three-quarter-cent sales tax is rejected, the current 1% sales tax will remain in effect until its bonds are paid off in 2014.

Gosack said that while this was true, the tax rate will not change if voters approve everything on their ballots.

ANIMAL CONTROL TABLED
Directors rejected a motion to table indefinitely a pair of animal control ordinances, instead opting to table the ordinances for nine months.

The ordinances would require all owners of dogs and cats to register their pets and would also establish new spay and neuter regulations. Directors had already tabled the ordinances twice — for six months, on April 5; and for three months, on Oct. 4.

In the interim, a Board-appointed animal task force made a series of recommendations to directors.

Directors were divided on the issue, with Directors Merry and Pam Weber pushing to pass the twice-tabled ordinances immediately.

“These measures continue to be the most cost-effective way to address this issue,” Merry said.

He said that to table the measures for a third time would merely “kick the can down the road.”

“I take exception to that,” responded Director Don Hutchings, who said the Board had intensively studied the issue and formed the task force to get more input. “That’s not inaction,” he concluded.

Merry said again he felt the ordinances should be voted on and passed immediately, arguing that they followed a pattern set by other cities in Arkansas, particularly North Little Rock.

“This is what they’re doing,” he said.

“But it’s not working for them,” said Settle.

Settle said he talked to several veterinarians from North Little Rock who have expressed frustration over how ineffective the city’s animal control policies are.

A motion to table the ordinances indefinitely, made by Settle, failed by a 3-4 margin. Director Steve Tyler then moved to table the ordinances for 9 months, upon Gosack’s recommendation; Tyler’s motion passed, 5-2.

Directors also unanimously passed a motion redefining the role of the Animal Services Advisory Board (a separate entity from the task force, which has dissolved), giving it more input into future animal control ordinances.