Fort Smith street tax program has spent $24 million on Chaffee, full spending picture incomplete

by Aric Mitchell ( 689 views 

The Fort Smith engineering department has spent $24 million across 14 projects developing the Chaffing Crossing district in the eastern portion of the city, according to Jennifer Walker, the city’s finance director. The funds were sourced from the voter-approved 1% street tax program enacted by voters in 1985 and up for renewal in 2025.

The top three projects — accounting for $15.249 million of the overall spend — are the Massard Road extension ($6.492 million); Chad Colley extension from Massard to Rye Hill ($5.443 million); and a second Chad Colley extension from 2,000 feet south of Roberts Blvd. to Massard ($3.314 million). The remaining $7.251 million were spread across 11 projects with an additional $1.5 million in “indirect” costs (i.e. administrative support) rounding out the total.

Responding to an inquiry from Talk Business & Politics, Walker said it was difficult to ascertain total expenditure of city funds in the Chaffee Crossing area because several departments that regularly service the area — police, fire, planning and development, to name a few — do not keep track of costs by geographical area.

However, the Fort Smith police and fire departments provide regular service coverage to the area and construction of Fire Station No. 11 on Massard Road added $2.73 million to the city’s overall investment.

Another major city-funded project is the River Valley Sports Complex, which at last count had $1.1 million in payouts with a projected final cost of around $6 million since the city severed its partnership with organizers Lee Webb, a Fort Smith businessman and chairperson of the Arkansas Economic Development Council (AEDC), and Sen. Jake Files, R-Fort Smith, at the end of January.

The planning and development department has provided inspection and review costs, but those are “hard to calculate because they don’t track their time by project,” Walker said. “The fees they collect on permits (in theory) offset the charges of time, although I’m pretty sure the revenue doesn’t cover the costs since the fees haven’t been updated in at least 10 years.”

That leaves the utilities department. Talk Business & Politics is in the process of collecting the department’s spend on developing infrastructure in the Chaffee Crossing district, but has not received data from the department as of Monday (Aug. 21). Walker also requested the information and is awaiting a response.

The difficulty, as Walker and Fort Smith City Administrator Carl Geffken pointed out, goes back to the fact the city does not “undertake geographic-based budgeting nor do we have much of this information readily available,” Geffken said.

Walker is hopeful implementation of the city’s Enterprise Resource Planning (ERP) software will help address this, noting that “geographical tracking of costs would be insightful.” The city expects to finish implementation by the close of 2018.

The Fort Chaffee Redevelopment Authority (FCRA) and Fort Smith Regional Chamber of Commerce have worked to attract outside investments to the 7,000 acres committed to the area through 1995’s federal Base Realignment and Closures (BRAC) program. Since FCRA began in 1997, it has helped unload approximately 4,500 acres. There are around 1,700 marketable acres remaining with an extra 800 that are considered “wet lands” and difficult to sell.

Outside of land sales and donations for economic development, the trust has spent or committed around $16.1 million on improvements to the benefit of Fort Smith and other cities in the region. The spend consists of $4.991 million in road construction; $7.003 million in water and sewer; and $63,000 for electric. It has also committed $1.5 million for new trails, $2 million for the Hwy. 255 relocation project, and a $600,000 grant pending for sewer work in its historic district.

But for some, it’s not enough.

At a meeting on Aug. 3, committee member David Armbruster of the capital improvement plan (CIP) advisory committee for the street tax program suggested FCRA should consider “putting the brakes” on the speed of its development when approached by representatives from ArcBest, the Arkansas Colleges of Health Education (ACHE), and Rod Coleman of ERC Holdings.

The three entities were hoping to have the widening of Wells Lake Road bumped up in the CIP to mitigate an inevitable traffic boom as ACHE adds one new class of medical students per year and ArcBest brings 975 new jobs to the district with its new corporate headquarters. Coleman’s ERC has been one of the area’s major real estate developers, contributing significantly to Chaffee’s 124 residential neighborhoods.

At the same meeting, CIP committee member Robert Brown, while being “for growth,” suggested the FCRA should bear more responsibility for improvements to the area.

“We want more revenue. We want the city to grow. We want better streets. We’re just talking, who’s going to pay for it? And I’m saying, share some of that cost with us,” he said.

Representatives from the three firms said they had “safely” poured $40 million each into Chaffee Crossing (a $120 million minimum of investments that likely would not have happened without access to the land). As Geffken told Talk Business & Politics, this growth in the east side of Fort Smith “benefits the entire city through new jobs” and “additional amenities, including restaurants, new homes,” and recreational opportunities. It also adds to the tax base, as ACHE President and CEO Kyle Parker observed, noting the school’s planned zoning development would create $56 million in taxable annual income — a $560,000 annual benefit to the street tax fund alone.

However, Armbruster argued the city was at risk of “falling way behind” on its resurfacing needs, pointing out that roads are to last 30 years and since the city has 480 miles, it needs to do about 15 miles per year with the fund. “Over the last few years, we’ve been resurfacing about 5-8 miles per year,” Armbruster said.

The CIP committee has asked FCRA Executive Director Ivy Owen to attend its meeting on Aug. 31 to answer questions regarding the FCRA’s financial participation. Owen has accepted.