The Fort Smith Convention Center and Riverview Hope Campus could face tough deliberations as the city’s Board of Directors reconvene for night two of 2018 budget hearings on Tuesday (Nov. 28) from the Fort Smith Public Library Central Branch on Rogers Avenue.
On Monday (Nov. 27), the Board held a marathon four-hour session to review proposed budgets and spending requests from each of the city’s departments. The Tuesday night meeting will consist of final department reviews (including sanitation and utilities) as well as final deliberations and prioritization of spending requests.
City Director Tracy Pennartz, speaking to the city’s $777,000 annual subsidy to the Convention Center, told Tim Seeberg, general manager of the Convention Center, that “Whatever you’re doing is good, but it’s not enough.” Pennartz indicated the city could not afford “any extra pressure on the General Fund” with unmet obligations such as pay increases to city employees or funding of older plans under the city’s local police and fire pension (LOPFI) which faces insolvency in a little over a decade.
While Fort Smith Mayor Sandy Sanders said the Convention Center generated around $450,000 to the city in tax revenue for the previous year, Pennartz said, “I understand that part of the argument, and it’s not as if that’s not important, but in the face of our citizens not really wanting to support a sales tax increase, I just feel like we need more from you than 50%.”
“I’m not sure how much longer the $770,000 is going to be available. I’m not even sure if it will be available this year because we haven’t gotten to that discussion,” Pennartz added.
To Pennartz’ point about voter dismissal of a new sales tax to fund the center, a previous effort in November 2011 failed with 62.7% of voters rejecting the proposal of a 1% prepared food tax that was estimated to raise $1.8 million to help fund the center, which was expanded in the late 1990s. Failure on the vote resulted in the current subsidy.
The 2018 proposed budget calls for an estimated $1.635 million with $843,915 in salaries to the 13.5 employee positions — this includes regular salaries, overtime, retirement, Social Security, insurance costs, and workers’ compensation — and $673,595 in operating expenses. An additional $117,500 is for capital outlay that would include carpet replacement and a commercial kitchen hood and fire suppression system to allow vendors to prepare more meals on-site.
The 2018 budgeted revenues outside of the city’s General Fund distribution are $689,000.
Pennartz also did not appear ready to entertain a request for $33,000 to add a second administrative position at the Riverview Hope Campus. The Board passed on the request from Fort Smith Housing Authority Executive Director Mitch Minnick in 2016 for the 2017 proposed budget. Minnick believes a second executive position is necessary to pursue grant funding the campus would need for ongoing expenses, and the authority already has contributed its own $33,000 disbursement to the effort.
During the Hope Campus’s first full month of operation (October), it averaged 80 occupants per night and served more than 10,000 meals to help feed the city’s homeless population.
Pennartz did not close the door on supporting an additional expenditure, but she did say she wasn’t “ready to give them $33,000 until I see what they’ve done (in fundraising — information Minnick will present on Tuesday).” Pennartz continued: “That’s $33,000 from the General Fund. That’s $33,000 from our employees.”
Revenue recommendations for 2018 include instituting a business licensing fee that is expected to bring in $686,818, all going to the General Fund. The city also plans to increase franchise fees to the maximum allowable amount which will generate $554,000, all to the General Fund.
The city also plans to institute a water/sewer fund franchise fee to add $100,000 to the General Fund. The city also expects to add another $373,000 to the General Fund by cost avoidance measures that would include $200,000 in vehicle maintenance reductions by moving to a leasing program and shifting $248,000 in Humane Society provisions to the sanitation department.
Recommended General Fund expenditures include a 2.5% cost of living adjustment for employees not covered by police or fire step increases and additional pay increases to police officers and firefighters totaling $665,202 – $321,966 to police, $343,236 to fire. The budget also calls for an additional $100,000 toward the insufficiently-funded older local police and fire (LOPFI) pension plans.
The most substantial recommended new expense for 2018 is $5.864 million devoted to capital expenditures in the utility department to help address, in part, the federal consent decree brought on by years-long violations of the 1973 Clean Water Act. The order is estimated to cost $480 million over a 12-year period that began in 2015.