Questions, concerns raised about Fort Smith fire services contracts

Zero Mountain CEO Mark Rumsey is frustrated and concerned about what the city of Fort Smith doesn’t know about a $1,000 a month fire services contract the company has paid the city since July 1987. Sharing that frustration is Fort Smith Fire Chief Mike Richards, who was recently made aware of the system put in place long before he was the top firefighter boss.

Fort Smith-based Zero Mountain is in the midst of an expansion that included the acquisition of a 206,000-square-foot dry goods warehouse in Fort Smith adjacent to their cold storage facility. The company also is more than nine months into expanding its Zero Mountain Logistics company. The new division employs around 30 people, including around 20 truck drivers, with plans to employ 50 by the end of the year and have up to 35 trucks and drivers running coast-to-coast and within the region.

Zero Mountain began in 1955 in a limestone mine located in Johnson (in Washington County near Springdale). The old mine had 25,000 square feet of refrigerated and freezer space. The company today is a $50 million dollar operation that employs 175 people and provides more than 30 million cubic feet of control temperature storage in Fort Smith, Johnson, Lowell, and Russellville. The company handles each year more than 2.5 billion pounds of product.

The Zero Mountain facility in Fort Smith sits just a few yards outside the city limits, as does the newly acquired warehouse – although both are within less than a half-mile of the Fort Smith fire station on Burrough Road. To ensure fire protection, Zero Mountain was paying $1,000 a month, as were the previous owners of the warehouse. In asking if the company would have to now pay $2,000 for fire protection, a lot of unknowns were discovered as to how the city of Fort Smith initially set up the contracts and have managed them.

“Look, there appears to be no rhyme or reason for these (contract) amounts,” Rumsey said in a recent interview. “We have no problem with paying for a service. I will gladly pay for that … but I think there is a very fine line here between paying for that” and being taken advantage of.

WORKING ON A BETTER PROGRAM
Zero Mountain officials were not able to find a contract or receive one from the city. Also, the amounts paid by other companies for Fort Smith fire protection appear arbitrary. The Gerdau MacSteel plant also pays $1,000 a month but is almost four times larger in terms of assessed property value. Rheem Manufacturing pays $975 a month, but the smaller Wal-Mart distribution center at 8100 South Zero pays $1,000 month.

Chief Richards told The City Wire he has no idea how the system was put in place or how the payment amounts were determined.

“I can’t answer why that is,” said Richards. “I can find no documentation of the methodology used to establish those fees.”

The program was unknown to Richards because the money goes straight to the city’s general fund and is not revenue that directly feeds the city’s fire department. According to calculations made by The City Wire, the annual revenue from the program is at least $75,000 a year.

Richards, who admitted to being frustrated about the lack of knowledge with the service, said his goal in the next few weeks is to work to learn the history of the fire protection service and come up with a better program.

“Our intent is to go through this and figure out how do we move forward and come up with some kind of methodology that is fair and sustainable and say, ‘This is a good method to use that everyone can understand,’” Richards said.

'STATUS QUO' CONCERN
In a July 23 memo to Acting City Administrator Jeff Dingman, Richards outlined the problems with the existing system. He noted that of the 11 cities in the region with “career fire departments,” none provided similar type of fire protection contracts. Richards said the city needs a new policy that includes decisions on continuing providing fire service outside city limits, and creating a new fee schedule if the service is continued.

Richards’ memo also included analysis from former City Administrator Ray Gosack suggesting that providing fire services to companies outside the city limits reduces the “potential for annexations and growth in the tax base.” According to Gosack’s note, operations outside the city limits don’t pay the city property taxes, sales taxes and other fees that support fire and police protection services.

To that point, Rumsey said he understands the pros and cons of being inside and outside city limits, but that is not his concern in this case. His point is that the city has had a fire protection plan in place for almost 40 years that “nobody can tell me how it works” or “where the authority is” to contract for such services.

“That’s the problem here. This is just another example of where the city is operating at the status quo,” Rumsey said.