The Fort Smith Board of Directors approved almost $127 million in operating budget spending at its regular meeting Tuesday (Dec. 3). The approved budget includes a general fund budget of $43.185 million, $3.28 million less than estimated realized spending in 2019.
The approved budget includes additions to the budget from what was presented at budget hearings held Nov. 22. During that meeting, the board said they wanted funding for a new computer aided dispatch and records management system, the police and fire dispatch system, according to a memo from Victoria Runkle, interim finance director. That new system will cost about $1.5 million, so another $500,000 will be needed in 2021, the memo stated.
The approved budget contained two other changes from the proposed budget. There were changes in the numbers in the distribution of money for position changes.
“These changes, often referred to as ‘reclasses’ or ‘regrades,’ occur when a position is expected to perform at a different level. The Human Resources Department reviews these requests for both internal and organizational equity. On November 22, the list of changed positions was provided,” Runkle said in the memo.
Changes also had to be made to show appropriations for the equipment sinking fund. Funding of $519,800 for the sinking fund was shown in the budget, but the appropriation was not listed on the Nov. 22 draft. That change was since made to the budget, Runkle said at the meeting.
Operating budget revenue and spending has become more critical in recent years thanks to a federal consent decree the city began working on in 2014. The decree, mandated by the U.S. Department of Justice and the U.S. Environmental Protection Agency, requires the city to make an estimated $480 million worth of sewer upgrades over the course of 12 years – through 2026. Funding for consent decree work has come in part from water and sewer bill increases, which are up 167% since 2015. Funding for water and sewer work also comes from bonds supported by sales tax revenue and revenue from wholesale water buyers. Most of that revenue feeds the operating budget.
The approved budget shows the operating budget revenue at $131.58 million. This is $6.081 million more than 2019 budget’s estimated revenue of $125.498 million. Estimates of actual spending differs from the original 2019 budget that had revenues at $130.793 million. Operating budget expenditures for 2020 are estimated at $126.976 million, $3.648 million more than the 2019 budget. The operating budget expenditures for 2019 were budgeted at $125.147 million with 2019’s estimated expenditures coming in at $123.328 million.
“I want to make clear,” said Director Lavon Morton. “This (base) budget is approved with no increase in sales tax or fees by citizens.”
The approved base budget includes $59,730 for an assistant to the mayor. Fort Smith resident David Harris addressed the board saying a mayor, which in Fort Smith is a part-time position, with a salary of $10,000 a year, plus $450 a month for vehicle allowance, does not need an assistant who makes approximately $60,000 a year.
The mayor’s assistant position was moved from the utilities department. Jurena Storm worked as the communications and training program manager for the utilities department. During the record flooding of the Arkansas River in May, City Administrator Carl Geffken changed Storm’s duties to work to support the mayor sending out public service announcements and information regarding the flooding. She is now assisting the mayor, who is the chair of the state-wide complete count committee, with the upcoming census count. The move is something Geffken as the city administrator is authorized to do.
“Because of those two items and because it’s also in our city ordinances that should the need appear, that the city administrator shall provide support to the board of directors and the mayor, I made the decision to transfer Jurena Storm to assist the mayor,” Geffken said. “This is filling a need the city has to make sure we have a complete count.”
An accurate census count is vital to the city because each person counted in the census equals $33,000 in federal monies for the state over a 10-year period. A portion of that goes to the cities.
Though the board passed the base budget at Tuesday’s meeting, concern was raised during the budget meeting in November of how to fund new requests for each department. Those items have been postponed and will be addressed at study session Dec. 19.
The board also approved an ordinance to adjust the 2019 budget. The city has started to receive flood insurance reimbursement monies, Runkle said. It received $2.797 million in October for the Fort Smith Port Authority.
“We are still owed approximately $600,000 from the insurance company for the Port; and up to over $10 million between the insurance company and FEMA for all damage (to city property). However, since we are the Port authority’s fiscal agent, we need to appropriate the $2.7 million in order to transfer the monies to them,” Runkle said.
The port authority signed a construction manager as constructor contract with Cameron Hubbs Construction, Inc. at a special meeting Monday (Dec. 2) to rebuild two warehouse, an office building, parking and a truck scale at the Port of Fort Smith. An exact dollar amount or maximum price was not set.
Both parties, the authority and Cameron Hubbs, president of Cameron Hubbs Construction, agreed they could come back after the first of the year and set a maximum cost point after the all insurance monies the city will receive for property damaged in the flooding has been properly distributed. The estimated insurance payout is between $2.7 million and 2.9 million said Deputy City Administrator Jeff Dingman, though the city could receive FEMA funds that would add to that amount.