The Fort Smith Central Business Improvement District (CBID) board members will on Tuesday (Aug. 20) discuss the potential of raising almost $39,000 in revenue from CBID property assessments within the district which includes all of downtown Fort Smith.
According to state law, there are two types of assessments that can be levied against real property inside a city’s improvement district — a project/improvement-specific assessment, levied to fund a “specific ‘plan of improvement,’” or a supplemental annual assessment to be used for ongoing operations or maintenance activities, Deputy City Administrator Jeff Dingman said in a memo to the board dated Aug. 16.
The project-specific assessment can be used for on one or several major improvement projects. This type is “implemented by filing the assessment of benefits to pay for the improvement(s) with the city clerk, who then puts it in front of the City’s governing body to adopt by ordinance,” the memo said.
Dingman said the statutes appear to imply that this plan for improvement and the assessments should be done when the district, in this case the CBID, are first created, but “it appears to me that our already-existing CBID Commission can adopt a new or updated ‘plan for improvement’ (along with an estimated cost of the improvements) and implement the assessment process by filing the plan for improvement and the assessment plan with the city clerk.”
These assessment proceeds can then be used to pay for the improvements directly or dedicated to the retirement of bonds secured for such improvements. Supplemental annual assessments for operation, maintenance, repair and replacement can be levied and collected in addition to the specific plan assessment.
Based on property valuations as of July 28, each 1-mill assessment on properties within the CBID would amount to $38,834.47 in annual operating revenue, the memo said. A half-mill assessment would amount to $19,417.23 in annual operating revenue.
“If an operating budget amount is determined, it can be divided by that amount to determine the size of assessment needed to fund it,” Dingman said in the memo, noting that the information he provided is generalized and provided for discussion purposes.
As of the end of July, the CBID had a checking account balance of $65,521. The biggest source of income is $5,410 in monthly rental income from the University of Arkansas at Fort Smith for the Lion’s Den building in the district. The biggest expense for the CBID is a $4,810 monthly loan payment to First National Bank of Fort Smith.