In separate unanimous votes, the Fort Smith Board of Directors on Tuesday (Dec. 21) voted to stop the Feb. 8 sales tax extension election they approved Nov. 16. Directors said they needed to step back and better educate voters and get voter input.
The city board on Nov. 16 voted to approve two sales tax extensions. The first sought to extend a 0.25% city sales tax from Sept. 20, 2022 to Sept. 20, 2042, to support the fire department and the parks department. That tax generated $5.7 million in 2020. The second would extend a 0.75% sales tax from Jan. 1, 2022, to Dec. 31, 2033, with 83.3% of the revenue going to federal consent decree work on the city’s water and sewer system, and 16.7% directed to the city’s police department. The tax generated $16.99 million in 2020.
After years of failing to maintain water and sewer infrastructure to federal standards, the city entered into a federal consent decree with the U.S. Environmental Protection Agency and the federal Department of Justice in late 2014. The consent decree required the city to make an estimated $480 million worth of sewer upgrades over the course of 12 years. Because of inflation and the state of the city’s sewer system, that number is estimated to be closer to $650 million.
Over the past six years, the city has spent approximately $127 million in capital costs for required improvements added to the $200 million on storage tanks and equalization basins to reduce wet weather sanitary sewer overflows, the basis for the consent decree requirements, spent prior to the consent decree. Utilities Director Lance McAvoy estimates the city will need to spend more than $600 million more in order to complete the necessary work.
The consensus discussion among directors during Tuesday’s meeting was that any tax proceeds to pay for consent decree work should end when the work is finished. It is unclear if the consent decree work will continue for another 10 years.
Director Lavon Morton said delaying the vote was the “right thing to do” and he hopes an election can be held with the Arkansas primary election set for May 24.
“I think this was a good move by the city. We have an obligation to inform the people of Fort Smith and provide them all the information we can about this so they have a chance to decide on which way to vote when we have the election, hopefully in May,” Morton told Talk Business & Politics after Tuesday’s board decision.
Director Kevin Settle said the board should soon hold meetings in each of the city’s four wards to gather input and educate voters about the need for the tax extensions.
Fort Smith attorney Joey McCutchen, who at a Citizens Against Unfair Taxes press conference held Dec. 14 urged the board to stop the election, said he personally “will not actively oppose it” if the board develops a “reasonable” plan for the tax extensions. McCutchen said Tuesday he hopes the board asks for five-year extensions instead of a 10-year plan, but said he is flexible.
“It depends on what ‘it’ is. But I would like to see five (years) across the board,” when asked if a 10-year extension is a deal killer. “So, what I’m saying is I recognize the need to fund government. And I recognize that parks serve as a valuable service, and so does our police, our fire, and we have to have money for those. And we certainly have to have money for the consent decree.”
Sebastian County Election Commission Coordinator Meghan Hassler said she does not yet have a tally on costs incurred so far for the Feb. 8 election. Her office has already paid for legal notices, have staff costs in setting up voting centers and organizing poll workers, and may have a cost for printing ballots.