Fort Smith Board to consider Convention Center budget cut

by Aric Mitchell (amitchell@talkbusiness.net) 550 views 

At the end of Tuesday’s (Jan. 23) study session of the Fort Smith Board of Directors, Director Tracy Pennartz asked for a Feb. 13 study session to discuss cutting the Fort Smith Convention Center subsidy for 2018 by more than $70,000.

The city’s annual contribution to the Convention Center is around $770,000, which comes out of the General Fund that pays for the police and fire departments. Pennartz asked for a clean 10% reduction.

“I know that I’m on record as saying the staff there has done a good job, but it’s not enough,” Pennartz said.

The ask isn’t surprising when measured against Pennartz’ previous comments. During a 2018 budget planning session on Nov. 28, 2017, Pennartz questioned the need for funding the Center at all, indicating the city could not afford “any extra pressure on the General Fund” with then-unmet obligations such as pay increases to city employees or funding of older plans under the city’s local police and fire pension (LOPFI) that faces insolvency in a little over a decade.

At the November meeting, it was pointed out to Pennartz that the Convention Center generated around $450,000 in 2016 tax revenue.

“I understand that part of the argument, and it’s not as if that’s not important,” Pennartz said. “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%.”

To Pennartz’ point about voter dismissal of a new sales tax to fund the Convention 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 budget calls for an estimated $1.635 million to run the Convention Center 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.

Talk Business & Politics asked Fort Smith Convention Center General Manager Tim Seeberg for comment as well as some insight on how a 10% subsidy cut would affect the budget moving forward.

“Honestly my initial reaction to this is that I will look forward to what comes as a result of the next study session to see which direction this goes,” Seeberg said. “It would be premature for me to comment on how any sort of reduction to the subsidy may impact our budget and/or venue operations.”

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