FCRA responds to ‘dissolution’ questions from local governments after almost 7 months

The Fort Chaffee Redevelopment Authority (FCRA) finally answered 10 questions from the trust’s beneficiaries about the FCRA’s dissolution. The response was made after almost seven months, and a day before the Fort Smith Board of Directors was set to act on the lengthy FCRA delay.

In those responses, FCRA says the trust needs another 10 years to wind down and dissolve.

The Fort Smith Board of Directors’ agenda for its regular meeting Tuesday (March 5) includes a proposed resolution requesting the FCRA Board of Trustees to answer the questions of the four beneficiaries – Sebastian County, and the cities of Barling, Fort Smith, and Greenwood.

In a memo on the resolution, Fort Smith Administrator Carl Geffken summarized the matter saying that the Fort Smith Board of Directors requested a meeting of all the FCRA beneficiaries and the FCRA board in order to discuss and determine FCRA’s plans regarding dissolution.

“A joint meeting of this size was deemed too difficult to schedule, so the four (4) beneficiaries decided that the mayors, county judge, city administrators, and county administrator would meet to determine the questions the beneficiaries were looking to be answered,” the memo said.

Representatives of the four beneficiaries of FCRA met Aug. 7 and agreed to a list of questions that was then to the FCRA Board of Trustees and executive director by Geffken.

“It has been seven months since the email was sent and the beneficiaries have not received a reply. This resolution requests the chair of the FCRA Board of Trustees to come to a board meeting or study session of the City of Fort Smith Board of Directors and provide answers to the questions contained in the resolution,” the memo said.

An email was sent by Geffken Aug. 8 to Daniel Mann, FCRA executive director and CEO, and the FCRA Board of Trustees with 10 questions. The email was copied to Sebastian County Judge Steve Hotz, Fort Smith Mayor George McGill, Barling Mayor Greg Murray, Greenwood Mayor Doug Kinslow and Barling City Administrator Steve Core.

Mann sent an email to Geffken, Mayor McGill and the board of directors Monday (March 4) after learning about the agenda item. In that email he answered the questions asked in August.

“Daniel called me this morning. He found it on the agenda. He didn’t get a call. We put together answers to those questions this afternoon,” Dean Gibson, FCRA board chairman, told Talk Business & Politics. Repeated attempts by Talk Business & Politics to contact Mann were unsuccessful.

The emailed letter from Mann and Gibson answers all 10 of the questions posed in the original email, and notes that FCRA was not made aware of the original meeting.

“While the memorandum included with the agenda item claims the FCRA’s four (4) beneficiaries agreed to these questions at a previous meeting between the beneficiaries, the City of Fort Smith organized the meeting of the beneficiary representatives but for some unknown reason decided to keep the FCRA in the dark on the meeting. To the FCRA’s knowledge, there have been no follow-up meetings. Nonetheless, we seek to remain partners with each of our beneficiaries, especially the City of Fort Smith,” the email said.

It also reminded all that under the Indenture of Trust, the mayor of Fort Smith or his designee, the mayor of Barling and the Sebastian County Judge are ex-officio members of the FCRA Board of Trustees.

“This means that the City of Fort Smith always has a seat at the table of every FCRA meeting, where the City of Fort Smith is invited to participate in all of our discussions on all agenda items and ask questions related to the agenda,” noted the FCRA letter.

Following are the FCRA answers to the questions submitted in August 2023.

• What is the amount of time needed to close FCRA in an orderly basis? Is it two or three years?
It is currently estimated that the process of winding down and dissolving the Trust will take less than 10 years. The specific amount of time needed is dependent on historical trends and other economic and political factors. In 2019, the FCRA hired Mr. Mann with the goal of leading the Trust through its winding down and final dissolution. However, too much work remains to be completed before that process can begin.

• If three years is the estimated time to dissolution, what steps need to be taken by FCRA and the beneficiaries to insure the dissolution is completed successfully?
As noted in the response to your first question, it is currently estimated that the process of winding down and dissolving the Trust will take less than 10 years. When the FCRA and its beneficiaries bound themselves to the irrevocable Trust, they agreed to the limited means of termination set forth in Article X of the Indenture of Trust. As a result, the steps required to be taken to ensure a successful completion of the process will first require the unanimous agreement of the FCRA and its beneficiaries, who will then coordinate with one another when the need to dissolve arises.

• What matters need to be handled/run/managed by the beneficiaries after dissolution?
It is simply too early to know. The FCRA and its beneficiaries will coordinate with one another when the need to dissolve arises and is unanimously agreed upon. Yet, matters to be determined at that time will include: management of 5.2 miles of railroad, transfer of land use regulations currently overseen by the FCRA though its Master Development Guidelines, transfer of oversight of environmental use controls, ensuring the timely development of property currently under the purview of the FCRA, enforcing the existing contractual rights and responsibilities of the FCRA, which currently includes more than forty real estate purchase agreements where the buyer’s required improvements have not yet been completed, and the acceptance of the residue of the FCRA’s assets.

• Can the dissolution be completed sooner than three years? If so, what steps can be completed sooner for the steps listed in 2?
The FCRA does not currently anticipate dissolution in less than three years.

• How much land can be sold in the remaining years prior to dissolution?
The draft resolution of the City of Fort Smith already claims to have the answer to this question. It states in its final “WHEREAS” that “the amount of developable property, solely residing in the cities of Barling and Fort Smith is approximately 400 acres…” However, this number did not come from the FCRA. In fact, the FCRA disagrees with this assertion and believes the true number to be approximately 961 acres.

• What land will remain unsold after dissolution?
The FCRA holds title to approximately 1,298 acres of land with an additional 43 acres of landfill. Whatever is not transferred prior to dissolution of the Trust will remain.

• How much money is in the bank currently?
The draft resolution of the City of Fort Smith already claims to have the answer to this question. It states in its final “WHEREAS” that “the net assets available for investment by the Fort Chaffee Redevelopment Authority is approximately $8 million.” The FCRA includes a financial report as part of its packet for every regular meeting of the FCRA Board of Trustees. This financial report is emailed to your City Administrator and Mayor, in addition to many others. Also, a financial report is presented at each of these regular and public meetings. The FCRA’s assets change daily but the answer to your question is already provided to the City of Fort Smith on a monthly basis. Note: The January financial report included with the FCRA board package for the Feb. 14 board meeting lists total current assets as approximately $8.354 million.

• How much money can be generated by the sale of land before dissolution?
Unknown. This will be dependent on historical trends and other economic and political factors. See also response to questions 5 and 6, above.

• Are there any environmental issues known or expected prior to dissolution?
Yes. There are currently environmental use controls on three landfills, plus ongoing inspections for perfluorooctane sulfonic acid (PFOS) and perfluorooctanoic acid (PFOA). Other matters may develop or be expected prior to dissolution.

• How many files will need to be transferred to the beneficiaries after dissolution?
It is unclear what the specific request is here, but if the City is requesting how many hard and electronic files will need to be transferred, it is unknown at this time but is anticipated there will be no difficulty in transferring such to the beneficiaries when the time comes.

Mann and Gibson also suggested that Mann, Geffken, McGill and representatives of the other beneficiaries meet quarterly about ongoing operations.

The FCRA was formed in 1997 to oversee redevelopment of land released by the U.S. Army from Fort Chaffee as part of a Base Realignment and Closure downsizing.