Fort Smith City Director and business owner George Catsavis was a swing vote on the Dec. 5 decision to enact a $100 business license fee on the approximately 5,000 businesses within city limits, but he recently told Talk Business & Politics it is a decision he is still considering.
“It was a difficult decision, and I would have never voted for it if it was not going to be used to hire more officers, which we need,” Catsavis told Talk Business & Politics.
He added: “I am considering voting ‘No’ Tuesday if there is no assurance that it will be used to fund the police department.”
Catsavis’ vote pushed the business license fee into the affirmative along with fellow directors Andre Good, Keith Lau, and Mike Lorenz, while directors Don Hutchings, Tracy Pennartz, and Kevin Settle voted against. The 4-3 majority was not enough to waive second and third readings, making follow-up votes possible at the Dec. 12 special meeting or the Dec. 19 regular, meaning it’s possible Tuesday’s special meeting could result in a second vote if there is a motion. But if Catsavis chooses to change his vote at either meeting and the other No votes remain in place, it will kill the fee altogether.
At the Dec. 5 meeting, Catsavis expressed hesitancy in voting Yes, opting first to amend the motion to earmark it as an ongoing revenue source for the police department. The motion failed, thus placing any revenues into the city’s General Fund as outlined in the original motion. About 70% of the General Fund goes to fund the police and fire departments. Still, with no earmark, the money could theoretically be pulled away for other purposes.
“If you look at my past voting record, I have voted no to all increases,” Catsavis said, noting he also voted against a franchise fee rate increase that passed at the Dec. 5 meeting. Pennartz voted for it while Settle and Hutchings held out against both fee increases.
The business license fee is expected to raise $471,000 annually while the city will raise franchise fees for utility companies to the maximum allowable amount of 4.25% from the current 4%. The move, said Fort Smith Finance Director Jennifer Walker at the Dec. 5 meeting, is expected to generate $554,000 in new revenue. Combined, the two sources will add $1.025 million to city coffers.
Multiple business owners spoke out against the business license fee on Dec. 5, reminding the board a previous voter-approved sales tax had been passed under the “sell” it would be in lieu of business license fees and a move to incorporate would further mar the city’s reputation as not being business-friendly.
City directors face a number of General Fund revenue issues including a potential $20 million shortfall in old (before 1983) local police and fire pension plans as well as a shortage of officers and overrun of critically aging equipment in the police department.
Catsavis said the people of Fort Smith “are in a difficult position financially. The consent decree, to name one, has placed a burden on us. But I feel we need to protect our citizens and businesses and our homes. More police officers will definitely help — more patrolling, quicker response times. Many people have said they support this license fee if it is earmarked for police only, and I agree.”