CBID votes to send downtown Fort Smith assessment plan to Fort Smith city clerk

The Fort Smith Central Business Improvement District (CBID) Commission agreed Tuesday (June 21) to send its petition to levy a supplemental annual assessment for operations to the Fort Smith City Clerk in the next step toward an assessment on downtown property.

Once the city clerk validates the names and signatures on the petition, a packet including the petition, a proposed budget approved Tuesday by the commission, and a proposed ordinance will be sent to the Fort Smith Board of Directors that if approved will enact the assessment.

“Upon the Clerk’s verification, according to Arkansas state law the petition is to be submitted to the Fort Smith Board of Directors for adoption of an ordinance levying such assessment. Upon adoption of such ordinance, the assessment applies to all properties within the CBID, whether a property owner signed the petition or not (there is no provision for “opting-out”),” said a memo from Deputy City Administrator Jeff Dingman that was included in the CBID meeting packet agenda.

Dingman said the petition would be turned into the city clerk’s office this week and should take about two weeks for the names to be verified.

The CBID board has worked toward a property assessment – primarily in downtown Fort Smith – for almost three years. The board voted in August 2019 to pursue an assessment on downtown business. The Fort Smith CBID is the only one in the state not funded by an assessment.

Before an assessment can be levied, property owners who own more than 50% of the property value in the district must sign a petition agreeing to an assessment. There are 479 individual properties in the district, some of which are owned by the same entity. The board started collecting signatures on the petition in June 2021. Dingman gave the commission a report Tuesday that shows owners of 53.22% of the property in the CBID have signed the petition, including Baptist Health Regional Hospitals, which owns about 28% of the property in terms of value in the district.

DOWNTOWN PROGRAM PLANS
The CBID plans to use assessment funds to support an ambassador program to hire off-duty police officers as part of a Safety and Security program for downtown. That program would cost about $100,000 annually, according to a proposed operating budget. The Fort Smith Police Department now has one downtown ambassador on staff. This ambassador also services and enforces parking meters.

“Additional revenue to fund at least two additional ambassadors so that more hours of the day/days of the week might be covered is needed from this assessment. The Police Department would incorporate the additional revenue line into their department budget for expenses related to this program, which is intended to cover salaries only,” Dingman’s memo said.

The assessment would also fund a Green and Clean project that would include streetscape maintenance and landscaping, which could incorporate care of flowerbeds as well as pruning and possible replacement of trees, cleaning and repairs to benches, lighting and trash receptacles, litter control, conversion of lights along Garrison Avenue to LED and more. That program also is estimated to be about $100,000, the proposed budget shows.

“The Parks Department has an existing landscaping agreement with a third party contractor to service the streetscape landscaping knuckles at a ‘passable’ level,” Dingman’s memo said. “That program/contract would be greatly expanded to include all street tree maintenance and care, sidewalk & curb cleaning & maintenance, increased flower/plant volumes in landscaped areas, and more attention to beautification and detail by the contractor.”

Any remaining revenues above what is required for the two main programs would be maintained for the CBID to use for other operational expenses, programs or small-scale improvements as determined in their process to adopt an annual budget.

ASSESSMENT FUND ESTIMATES
The proposed budget projects the assessment will bring in about $255,000 in annual revenue. Other expenses, including architect or engineering services for the landscaping project, legal services and other expenses would also be paid by the assessment, the budget shows.

Based on property values in 2019, each 1-mil assessment on properties within the CBID would amount to $38,834.47 in annual operating revenue. However, that estimate did not take into account any property owned by not for profit agencies or local, state or federal government. Of the land parcels in the CBID, 115 are tax-exempt and have no value assigned to them. These include properties owned by governments, non-profits, churches, etc., according to information provided by the CBID.

In 2019, the CBID hired Total Assessment Solutions (TAS), Sebastian County’s contracted third-party appraisal partner, to assess property. Based on the appraisal, each 1-mil assessment on property within the CBID would amount to approximately $61,000. However, some of those properties would be exempt from the assessment. While some government properties would continue to be exempt from the assessment, not for profit entities would not be, said Michelle Allgood, the attorney working with the CBID on the assessment question.

Hanna said last year commissioners had agreed that city properties would not be assessed, but county and state properties would be.

Collection of the annual assessment will be coordinated by the Sebastian County Assessor as a special assessment on a property’s annual real estate tax bill, and then remitted to the city of Fort Smith. The funds would then be used for the purposes as stated in the CBID’s annual operating budget, which would be incorporated into the overall city budget for financial accountability and auditing purposes, Dingman said in the memo.

The petition sets the assessment as not exceeding 10 mils. In April 2021, the CBID board voted for a cap of 10 mils and to cap any property owner at a maximum $10,000. There are about four properties in the assessment area that cap will affect, Dingman said. Commissioners have stated they will decide each year what the coming year’s assessment will be if the assessment passes. The first year’s assessment, which if approved will be 8 mils in 2023. The CBID approved a resolution in November 2021 for a 6 mil assessment on property in the district.