Fort Smith proposed budget calls for expense reduction, more pay for directors

Although Fort Smith city administration does not believe the city will be hit by a possible recession, the 2023 proposed city budget includes $51.875 million in general fund expenses in the coming year, down 11% from the projected $58.442 million in 2022 total expenses.

The proposed budget also predicts $52.627 million in revenue for the general fund, almost $9 million less than this year’s $61.426 million expected in total revenue for the general fund.

During a Nov. 18 Fort Smith Board of Directors meeting to discuss the proposed budget and needs of city departments, board members asked what the thought process was for lower predicted revenue in the general fund. City Administrator Carl Geffken said as a region the possible new mission for the 188th Wing and the increase in residents who will move to the city for the first phase of that mission will continue the city’s building activity and increase in the city’s sales tax. Increase in small businesses openings and growth at the Arkansas Colleges of Health Education also indicate a healthy regional economy, he said.

“I don’t see us slipping into some type of a recession unless there is some large shock,” Geffken said.

City Finance Director Andy Richards agreed, saying the Fort Smith region has typically avoided the effects of highs and lows in the economy felt in other parts of the country.

“We are usually more stable than the rest of the country,” Richards said.

Geffken said the cut in predicted revenues, especially for the general funds, reflects the running out of federal American Relief Plan Act funds that started in 2021.

The proposed budget would allow for an additional $751,928 in the general fund’s reserve, which will bring the fund balance up to $28.851 million by the end of 2021.

The proposed budget also includes an increase in pay for Fort Smith city directors. Each of the city’s board members receive $1,000 per year by attending all 24 board meetings, or $41.67 for each meeting, according to Geffken. If a board member is unable to attend a board meeting, they do not receive the $41.67 for that meeting. Each director also receives $5,400 per year as a car allowance, or $450 per month. The proposed budget raises the expenditure for board members’ salary for 2023 from $7,000 to $14,000. Total car allowance is listed as going from $33,600 to $54,000.

The city’s form of government was changed from a mayor/commissioner system to a city administrator/board of directors system in 1967. City directors have not received an increase to their compensation since around that time, though at some point the car allowance was added.

Board members at Friday’s meeting discussed that the salary increase would still keep Fort Smith directors in the lower paid group of city directors or council members in the state.

“I don’t think many realize how much goes into being on the board,” said Director André Good, who is in support of the raise.

Raising the salary would also allow more people to run for the positions in the future, said Director George Catsavis, who would like to see the salary increase to more than proposed. Director Jarred Rego said that while he agreed the raise might be a good idea, he thinks directors voting it in for themselves would be “political malpractice.”

“I really think this is something that would need to go before the voters,” Rego said.

Directors discussed that the item should be left in the proposed budget, but a study session and further discussion on the matter was needed. Before a raise would be enacted, it would have to go before the board as a resolution sometime after the first of the year, Geffken said.

In other areas of the proposed budget, the street maintenance fund is budgeted at $11.584 million in expenses for 2023. Water and sewer has a budget of $64.147 million in expenses for the year, and solid waste has listed expenses of $22.225 million for 2023.

The ¼ cent sales tax earmarked for parks and the Fort Smith Fire Department is projected to bring in $7.044 million this year. That number is increased in the 2023 budget to $7.177 million.

The proposed budget lists $19.358 million in expenditures for the Fort Smith Police Department and $13.702 million in total expenditures for the Fort Smith Fire Department in 2023.

The budget will go before the Fort Smith Board of Directors for final approval in December.