Fort Smith 2014 budget cut proposal presented

Fort Smith City Director Keith Lau asked for scenarios to reduce $2.2 million from the city's 2014 proposed budget at Monday's (Nov. 18) and City Administrator Ray Gosack on Friday (Nov. 22) released a scenario that would result in layoffs, furloughs and the closure of fire station coupled with increases in fees and permits.

Lau had asked for the cuts as a result of general fund revenues in fiscal year 2014 only coming in at $45.716 million while the fund had projected expenditures of $47.919 million, resulting in Lau's request for a cut of $2.203 million.

Gosack first tackled the request by looking for revenue enhancements:
• Increasing franchise fees from 4% to 4.25%, resulting in additional revenue of $389,000;
• Increasing transit fares, resulting in additional revenue of $30,000; and
• Increasing alcohol-related permits and fees, resulting in revenue of $89,000.

In all, revenue enhancements would result in $508,000 in additional funding.

To tackle the remaining $1.695 million deficit in expenditures over revenue, Gosack worked with all city departments to reduce appropriations.

The biggest cuts to the general fund came to the police department, which showed expenses reduced by $667,200. The cuts included eliminating all animal control services and the boarding of animals at the Humane Society. Additionally, no calls for animal services will be answered by the police department.

The proposal released Friday (Nov. 22) also proposes eliminating two dispatchers, one records clerk and one police officer, which will result in longer response times for both emergency calls and records requests, Gosack said.

The department to show the next highest figure in reductions was the fire department, which could lose $332,000 in funding.

"(It) would result in a rolling brownout of fire station closures," Gosack wrote in a prepared memo to the Board of Directors. "It's estimated that one fire station would be closed 86% of the time, and that two fire stations would be closed 20% of the time. This lengthens response times for affected areas, increases property damage from fires, impacts firefighter safety, could harm the ISO fire insurance rating, and increases the potential for vandalism/damage to unoccupied fire stations and apparatus."

Also included in the proposed cuts is elimination of outside agency funding for non-profit organizations, which would save the city $162,000.

As a result of the cuts, the scenario to be formally presented to the Board of Directors at its Nov. 26 meeting would result in the elimination of 14 paid staff positions from the general fund and result in furloughs of three to five days in the building safety department, which "will delay response to contractor inspection requests and plan reviews for permits," Gosack wrote.

Asked whether he was intentionally presenting a budget was worse than it had to be, Gosack was direct in denying any such action.

"No. No. And that was one of the instructions to the staff when we began this was to make sure that we were not doing that because I knew it would be one of the criticisms."

Gosack also made clear that all of the recommendations for cuts in the scenario were prepared in a short amount of time, which meant the city's finance and administrative staffs were unable to present multiple scenarios as requested by Lau.

"It took me four days to put one scenario together. I don't have weeks to put multiple scenarios together," he said. "I've worked on nothing else but this since Tuesday morning (Nov. 19). And frankly, it's just putting the same marbles in a box and shaking them up and hoping they roll out differently, and they're not going to."

Lau said he had not yet seen the proposal and made clear his view that Gosack was purposefully trying to project the bleakest scenario possible in order to win public support for the original FY14 proposal.

"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."

Addressing Lau's concern that the city budget was not only balanced, but that it was on a "collision course" come FY2015 when deficits were projected to be over $10 million, Gosack said it was due to departments making anticipated requests for more funding than they would reasonably be approved for.

As an example, the police department requested $16.21 million for FY14 and has projected spending at $19.911 million in FY15, a 22.83% increase.

"What's caused that to happen is when the police department estimated their 2015 budget, they asked for a 25% increase in their budget, and that's not going to happen," Ray said firmly, adding that other departments had done the same and it was nothing different than in previous years. "Just like if you had gone back to the 2013 budget, you would have seen the '14 column and it was a lot higher than what the '14 budget ended up being."

Gosack said the explanation was no different than what he told Directors on Monday.

"It was explained, but it didn't fit the belief."

Lau was clear in stating that no matter Gosack's assertion, the budget presented to the Board was not balanced and the city continues on a collision course with financial disaster.

"All that detail is fine. I can't tell what is the best (thing to cut). But the policy should be that we have a balanced budget. I don't personally believe in the state of Arkansas' (view) of budgeting, which is allowing you to spend more than you bring in."

And even though Lau has pushed the issue, he knows he may not have the votes on the Board to implement a change is fiscal policy.

"It could be an exercise in futility if we don't get anything done, but it's not an exercise in futility to get the citizens informed of what's going on," he said. "If it gets that point out there and then it doesn't happen, so be it. That's what democracy is and that's why we have seven Board members, because we're not all going to have the same opinion."

The budget cut scenario released today is the only item on Nov. 26's study session agenda. The Board will meet at noon that day in the Fort Smith Public Library Community Room.

Gosack said he hopes for a vote on a budget by the Dec. 3 regular meeting of the Board.