Fort Smith Board OKs deal for Future School property, tables insurance service contract

The Future School of Fort Smith moved closer to a planned August 2016 opening during the Fort Smith Board of Directors meeting Tuesday night (Jan. 19) from the city’s Public Schools Service Center.

Also, the Board revisited 2015’s frequently debated topic of switching to the Arkansas Municipal League (AML) for property/casualty insurance, and a longstanding funding agreement with the Fort Smith Museum of History came under fire.

FUTURE SCHOOL
By a vote of 5-2, City Directors agreed to sell property located at 622 N. 7th St., as well as 515 and 701 N. 8th Sts. to Northwest Development Holdings in the amount of $110,000 for the purpose of leasing to the planned charter school for an initial three-year period.

Real estate agent Rodney Ghan, a member of Northwest Holdings, said the company would cover initial acquisition costs and base ongoing rent on required maintenance and upkeep.

“We’re not interested in trying to make dollars on it. We’re just wanting to get them in the building and keep the overhead as low as possible,” Ghan said, adding that the school would be presented with “options” for the next 20 years after the initial three were up.

“It’s whatever they want,” Ghan added. “It is for them. We’d love for them to stay there long enough. When the debt’s paid off, we turn it over to them.”

The city purchased the property in January 2013 for $107,500 and invested $4,860 in roof and drainage repairs. Ongoing maintenance costs the city approximately $2,000 per month, according to Fort Smith Parks and Recreation Director Doug Reinert.

Directors George Catsavis and Tracy Pennartz voted against the sale. Pennartz favored an open bidding process, while Catsavis inquired about the appraised value of the property. In 2007, an appraisal by Ken Colley and Associates priced it at $818,000, but as Director Keith Lau pointed out, “the property sat on the market with no offers for six years,” and anything gained from a higher sale price or from the open bidding process would likely be absorbed by the ongoing monthly maintenance expenses.

To the issue of open bidding, a memorandum from Acting City Administrator Jeff Dingman quoting City Attorney Jerry Canfield said that “while there is a prescribed process for the city to designate excess property and solicit sealed bids, such process is not required in the event the city receives an unsolicited offer to purchase city-owned property,” such as the offer made by Northwest Holdings.

For an initial five-year period, students will operate out of an onsite modular building as renovations are made to the existing facility. The school year will begin in August 2016 with 150 10th grade students. An additional 150 students will be added in the 2017-18 School Year, followed by 150 more, so the school will be home to grades 10-12 (450 students) by 2019. Funding for the school will come from the Arkansas Department of Education.

INSURANCE RENEWALS
In other decisions, the Board voted 5-2 (Catsavis, Hutchings dissenting) to table an agenda item that would have authorized a $28,500 expense for the hiring of BancorpSouth Insurance Services (BXS).

According to Dingman, BXS would help the city solicit bids for auto and property insurance renewal on its nearly $300 million in assets “by comparing prices and product features from numerous potential underwriters and ultimately reduce our insurance costs.”

Director Kevin Settle “reminded” Board members that the discussion came up about going with the Arkansas Municipal League in 2015 and that AML “would have saved us $250,000.” Before spending an additional $28,500, Settle thought it would be in the city’s best interests to table and have AML answer any questions and concerns Directors might have about their coverage limitations.

The Board will take up the remainder of the discussion at the Jan. 26 study session. The renewal date is March 1.

OTHER BUSINESS
Also Tuesday night, the Board voted 6-1 (Hutchings dissenting) to table a funding agreement with the Fort Smith Museum of History. The agreement would provide reimbursement of up to $20,000 annually for water, sewer, sanitation, gas, and electricity expenses. Director Pennartz felt the request was “no different from any other non-profit asking for help with their utilities,” and that the rationale that “this is the way we’ve always done it is not sufficient to continue this agreement.”

The contract the city has with the Fort Smith Museum of History dates back to 1936 and, according to Dingman, has no termination date. In tabling the item, City Directors asked Canfield to review the terms of the agreement before moving forward.

Also Tuesday night, the Board voted to define permitting fees for microbrewery restaurants, approving an annual collection of $250, which is in line with the amount paid by private clubs and retail liquor stores. The decision won unanimous approval.