Battle shaping up over Fort Smith 2014 budget

No one knows exactly what will happen to the city of Fort Smith's general fund budget once the Board of Directors meets for a third budget meeting on Tuesday (Nov. 26). But what is nearly certain is the expectation of at least some fireworks between the administration and the Board.

At issue is Director Keith Lau's request of City Administrator Ray Gosack to cut about $2.2 million from the city's budget. The amount is the difference between expenditures of $47.919 million and revenues of $45.716 million for the city, which Lau has said shows the city taking part in deficit spending.

Gosack has contended that the city is simply rolling over end of year balances into the following year's budget, meaning the city is not deficit spending.

Lau has held the position that the city must cut spending and have a higher end of year balance (now set at 7.5%, though Lau has said he would like it to be higher) in order to prevent a coming collision of lower revenues and spending levels in FY15 that appear to be at current rates or higher, resulting in more than $10 million in projected deficit spending.

He requested multiple scenarios for cutting expenses at the Nov. 18 budget study session. Gosack was able to only prepare one scenario to present to the Board given a week to develop the scenarios.

The proposed cuts were made public Friday (Nov. 22), which included increases in fees coupled with cuts to all city departments resulting in the proposed cut of 14 full-time staff positions from the general fund and furloughs in the building safety department.

In response to Gosack's presentation of the proposed cuts on Friday, Lau accused Gosack of using the media to advocate against the cuts.

"Gosh dang it, if you're not playing it out in the media, then what the hell are you doing? I can't express how frustrating this stuff is to me. This isn't how this works in the business world. We don't get emotionally involved and we take actions that are the best decision at the time."

‘PRETTY SEVERE’
Gosack would not respond directly to Lau's accusation Monday (Nov. 25), though he said the information made public should not have been a surprise to the Board.

"No to your first question," he wrote in an e-mail. "The information was made available to the board, media and public at the same time – when the meeting packet was posted on the (city's) web site."

Lau again reiterated his position by e-mail Monday after having a chance to review all of the proposed cuts, again saying he was not pleased with the scenario presented by Gosack. When asked where he would propose making cuts, Lau simply responded, "That's Ray's job."

"I want a general fund budget that reduces or eliminates the $2.2 (million) deficit between revenues and expenses and maintains a stable end of the year fund balance preferably the 15% mandated as good fiscal policy by the (Board)."

Director George Catsavis did not hold back on his view of the proposed budget cuts.

"I saw what (Gosack) proposed. I thought it was pretty severe," he said.

PARKS CUTS
Director Pam Weber also found the cuts to not be "very palatable." In order to move forward on the budget, she said it will take the Board making a series of decisions at the Tuesday study session.

"We are facing three options – stay at 7.5% (end of year balance), make necessary cuts to get to 15%, we can try Ray's cuts or do like we did a few years ago when we cut $750,000 from the budget and went line by line," she said. "I think first we've got to decide if we go (with) 7.5% or 15% or some point in between and how do we get there?"

Regardless of which decision is made, it appears that big changes could be in store for the budget though no one can articulate a clear vision of where the cuts would come from specifically. Catsavis pointed to various parks projects as over-extending the city's general fund.

"As Pam Weber (has previously) said, we're not going to be able to afford the projects we're building," he said. "It's going to catch up with us."

It is a point Weber made again Monday.

"I want to look at the Parks Department funding because I do think possibly that we are going to, by adding all of these new projects, we are going to put future pressure on the Parks Department budgets with maintenance issues and that type of thing."

"I do not want to see parks cut," said Director Philip Merry, though he conceded that Weber had a valid point which was worth exploring.

PUBLIC SAFETY CONCERN
Weber made clear that she wanted to do all she could to protect public safety funding for the police and fire departments, the two departments to experience the largest chunk of cuts in Gosack's Friday proposal.

"I think my thing is there are certain areas I'm uncomfortable with and I want to revisit those areas. I'm uncomfortable with the Police Department funding (cuts of over $600,000)."

Merry said he found Gosack's list of proposed cuts "unacceptable" and asked that he go back and find other areas for cuts. Should Gosack not present a set of budget cuts that he and other Board members finds acceptable, Merry said he was prepared to start the budget process from scratch.

"This is in my mind, but I'm not ready to make it my recommendation yet – (take) existing expense loads and priorities as it is right now and take the original budget as it is submitted and put it in a holding pattern and dig deep between now and February. And maybe we do need to have a (budget) year where we built it from scratch. Whenever you do a budget, you can have everyone tell you what they need and whether you agree with it."

BUDGET DEADLINE DEBATE
Weber said she was ready to look at the budget line by line to see where cuts were necessary, though protecting police and fire funding would be a challenge as the two combined with the Parks Department make up 70% of the general fund budget. But she said she'd be willing to go beyond Gosack's deadline of adopting a budget by Dec. 3.

"Technically we don't have to pass a budget until Feb. 1," she said.

Even though Weber is openly flirting with the idea of extending the budgeting process, Gosack said Friday (Nov. 22) it was imperative to get a budget passed as soon as possible.

"Well, I'm hopeful the Board will direct us to proceed with adoption of the budget in the Dec. 3 meeting. It sends a strong message when a governmental organization can adopt its budget in advance of the start of the fiscal year. It sends a strong message that we've got our financial plan in order, we know what we're going to do and we can adopt it before the fiscal year begins. And we've always adopted our budget the first meeting in December. I can't recall a year when we didn't adopt it in early December."

Weber said she would like to see Ray's desire for an adopted budget come to pass, but it will not be easy.

"The city's going to pass a budget. Is it more difficult this year? Yes, it's more difficult. But I hope we can pass a budget by Dec. 3 or in the month of December. I'm willing to do whatever the Board deems necessary to pass a budget in the month of December."

Merry was less certain of December adoption and had a message for Gosack.

"We can…go through each line item with a ruler in every department. If the law says we really don't have to have it until February, then go through it and remove every single speck of dust. Please, Ray, go back and make some recommended cuts and get back to us."

The Board will meet at noon Tuesday (Nov. 26) in the Fort Smith Public Library Community Room.