The Fort Smith Board of Directors wrapped up 2018 budget hearings on Tuesday night (Nov. 28) with final recommendations for spending and revenue. City Director André Good was on vacation and missed both of the four-hour sessions — the first was on Monday night — but four of the remaining six directors (George Catsavis, Keith Lau, Mike Lorenz, and Tracy Pennartz) indicated they would support most of the recommendations from city staff.
At the top of the list was a 2.5% cost of living adjustment (COLA) increase for city employees not covered by police and fire step programs. The COLA increase marks the first raise for department personnel in three years. The total approved expense will come to $703,458 citywide, and it will not include additional raises to police ($522,064) and fire ($438,958), which will be funded separately. The police and fire raises will bring starting pay for the two departments up 6% and 12%, respectively.
The Board also indicated it would support educational incentives to employees who improve their education relevant to their positions. However, the incentive will not apply to personnel whose education level is required as a prerequisite of employment. As an example, Fort Smith City Administrator Carl Geffken said his master’s degree would not qualify him for an educational incentive because the city administrator position requires a master’s for consideration of employment.
The exact dollar amount on educational incentives will have to be reworked and brought before the Board for final consideration along with the remainder of 2018 spending and revenue recommendations.
Also Tuesday night, the Board indicated it would support an additional $850,000 allocation from 2017’s baseline fund balance to the diminishing older pension plans under the local police and fire (LOPFI) program. The baseline fund balance is estimated at $41.52 million ($12.601 million to the General Fund that helps fund the two departments along with other essential city services). The new allocation will join with $150,000 added earlier in 2017 for a total of $1 million extra to the LOPFI problem before the end of the year. At the current level of funding, the older LOPFI plans would become insolvent in 13 years. The $1 million will extend the date of insolvency, though it will not be clear by how much until actuarial data is released in February.
The city has two advantages when dealing with LOPFI’s old plan problem. First, there are no longer any active fire or police personnel under the plans, which ended in 1983. Secondly, the plans will only need to be funded for the lifetime of the individuals eligible to receive them. The city can essentially “kick the can” until the problem takes care of itself provided they stay ahead of the insolvency date with added payments like 2017’s $1 million.
In approving the recommendations by straw poll, City Directors also indicated they would support $500,000 in police equipment purchases and training and citywide capital purchases totaling $7.123 million with a fleet leasing program ($1.013 million) and utilities outlay ($5.864 million) accounting for most of the expenditures.
Additionally, the Board agreed to unfreeze 13 police officer positions (a $695,000 line item) while adding positions in policy/administration, management services, police services, utilities, sanitation, and transit.
Agreed-upon revenue sources will include a $100 business license fee (expected to raise $484,490 for the year); increasing franchise fees to the maximum allowable amount ($554,000); and a water/sewer franchise fee ($100,000) for a total of $1.138 million to the city’s General Fund. Administration also expects a cost avoidance in lowered maintenance (refer back to the $1.013 million vehicle leasing program) of $200,000 ($125,000 of which will go to the General Fund).
While the proposed budget will not be approved until the Board of Directors receive the final draft at a regular meeting later this year, the Board does appear ready to provide the $777,000 subsidy to the Fort Smith Convention Center for another year.