Feb. 8 Fort Smith sales tax vote to get more scrutiny

A special called study session for the Fort Smith Board of Directors at 6 p.m. Monday (Dec. 20) will allow directors to discuss the Feb. 8 special election for the 0.25% and 0.75% sales and use tax. Delaying the vote to address citizen input and education could be part of the meeting.

Director Lavon Morton requested the study session at the Dec. 13 board meeting.

“There are, unfortunately, a number of items of business that I believe we need to address quickly,” Morton said.

Morton also told Talk Business & Politics the session could include discussion about delaying the vote in an effort to educate citizens about uses for the tax revenue and to seek citizen input in a more organized manner. He said Friday (Dec. 17) there have been a considerable number of calls from the public saying the city has not educated the citizens as to why the sales tax is needed and he wants to discuss that.

“It is important to communicate with the public on this topic. I want to get the board’s thoughts as well as the administration thoughts and of course the mayor,” Morton said.

Board study sessions do not allow for citizen participation, but they are open to the public.

The city board on Nov. 16 voted to approve two sales tax extensions. The first will 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.

At a Dec. 14 Citizens Against Unfair Taxes press conference, Fort Smith attorney Joey McCutchen urged the board to delay the Feb. 8 special election. There is no question that infrastructure has to be supported with funds, but the city needs to be open with all the information, he said. They could do that and hold the tax election at a later time in the year, thus giving all citizens the chance to provide input and learn about the need, he added.

One aspect of the taxes that concerns the Citizens Against Unfair Taxes is the length of the taxes. If approved, 0.25% sales tax will be collected for 20 years and the 0.75% will be collected for 10 years, the way the ordinances are now written. He also said the city has an appeal in place concerning the consent decree, is owed FEMA money from the historic flooding of the Arkansas River in 2019 and the COVID-19 pandemic that can go towards consent decree work, and is looking at possible grants.

After years of failing to maintain water and sewer infrastructure to federal standards, the city entered into a federal consent decree with the EPA and DOJ 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.