CIP member wants Fort Smith to ‘cease and desist’ in using street sales tax for other purposes

Fort Smith voters approved a 1% sales and use tax for the street program in 1985. The program pulls in around $20 million annually. But for 30 years, the city has allocated approximately 9%-10% of the monies for other purposes.

Now Fort Smith Finance Director Jennifer Walker is in the process of revisiting those allocations to make sure the money “lost” connects to the program in an appropriate way.

Walker is using an independent firm to conduct the study. She was on vacation for the week of Jan. 8-13, but Engineering Department Director Stan Snodgrass told Talk Business & Politics on Thursday (Jan. 11), Walker had indicated the allocation study was “six to eight weeks” from completion.

Walker first brought the issue to the attention of the Streets, Bridges, and Associated Drainage Capital Improvement Plan (CIP) Advisory Committee in June 2016, but said since departments were in the midst of preparing their annual budgets, it would be after the first of the year before the allocation study could proceed.

The CIP Board was eager for answers at Thursday’s meeting. Board member and Fort Smith-based property manager David Armbruster said the committee needed “to ask that the Board of Directors cease and desist transferring money from street funds to various other departments.”

Armbruster continued: “I’ve looked at the ballot titles, and the people were shown these funds would be used exclusively for streets, bridges and drainage purposes. Nowhere does it say it will be used for the city administration office and other departments. We should ask them to stop doing it and bring this to a head or they’re going to keep sweeping this under the rug as they have for the last 30 years.”

CIP Board member Robert Brown said in his past experience dealing with government entities, “they tend to estimate how much they want or need based on how much budget there is.”

“I think there is a lot of fluff in these numbers,” he said, adding that if allocations were to be made, it needed to be for “billable hours.”

As head of the most affected department, Snodgrass felt it was too early to draw conclusions on whether the current percentages are a negative, emphasizing the allocation study would go far in sorting it out.

“What I’m hearing is that they want to reexamine the percentage of allocations to see if they are in line with what the departments are doing.”

“The engineering department, which oversees construction projects, is the biggest group that’s going to use the fund, but you also have resolutions and ordinances, engineering contracts, all this other stuff that gets approved by the Board of Directors, that runs through the city administration office, finance, the clerk’s office, IT, planning, human resources — administrative type departments,” Snodgrass told Talk Business & Politics, adding that it was not just a street program issue — that other city revenue sources are subject to cross-departmental allocation. “There are other funding sources
citywide that could be affected (by the study), but we’ll probably be the biggest one.”

According to Ordinance No. 72-85, passed and approved on Aug. 13, 1985, a special election was to be held for implementation of the 1% tax on Sept. 17, 1985. Voters approved the tax with language stating simply that “The proceeds from such tax are hereby designated for the uses of city roads, streets, and bridges, and associated drainage.”

According to the timetable Walker shared with Snodgrass, the allocation study should be finished by the end of February or early March.