Fort Smith board approves 2026 budget, reduces personnel budget by $4.2 million

After broad praise of efforts by all involved to work through difficult budget cuts that tallied almost $17 million, the Fort Smith Board of Directors on Tuesday (Dec. 16) approved the city’s four operating budgets for 2026.

The largest part of $16.904 million in reductions to the city’s general fund, water and sewer fund, solid waste fund, and streets and maintenance fund came from removal of 71 now-vacant jobs. The job cuts are estimated to reduce the budget by $4.226 million.

The almost unanimous board vote followed several months of budget talks between city staff and the board.

The first proposed 2026 budget projected an $8.092 million deficit, with $53.695 million in revenue and $61.788 million in expenditures. Of the expenditures, $20.589 million was for the Fort Smith Police Department and $16.227 million is tied to the Fort Smith Fire Department. But the board pushed back against that budget plan and worked with city admin and department heads to seek a balanced budget.

Acting City Administrator Jeff Dingman on Dec. 4 sent the board a 17-page budget summary that included $16.904 million in expense reductions across the four budget categories.

“The budget was also reduced by removing the appropriate amount of health insurance, social security, retirement, workers’ compensation, and other benefits associated with each vacant position,” Dingman noted in the memo. “The eliminated positions include the eight police officer positions and the six firefighter positions as discussed on Nov. 17. When the final budget document is assembled after adoption, it will include the reduced headcount numbers for each program.”

OPERATING FUND NUMBERS
Following are the new revenue and expense projections for the four primary operating funds.
General Fund
Revenue: $54.265 million
Expenditures: $54.265 million

Water and Sewer Fund
Revenue: $72.235 million
Expenditures: $69.334 million

Solid Waste Fund
Revenue: $26.177 million
Expenditures: $20.253 million

Streets and Maintenance Fund
Revenue: $10.966 million
Expenditures: $10.671 million

BUDGET FEEDBACK
City Chief Financial Officer Andy Richards said he has expressed “concerns about the general fund” during the year because the city was spending about $13,000 more a day then incoming revenue. But with the proposed 2026 budget, he said he is “very optimistic” about the city’s future finances and hopes city staff, admin, and board can continue to work toward balanced budgets that also allow for necessary capital improvements.

Former Director Lavon Morton also praised city staff and the board for “doing the right thing” when it’s hard to make cuts in areas they typically support. He said he believes city tax revenue will improve in 2026 and “the city will be in a better financial position” because of the responsible 2026 budget plan.

Director Jarred Rego said “very significant” work by all parties helped deliver a budget that makes tough but responsible changes. Director Neal Martin also praised it as “a very good budget” that is balanced with enough savings to cover any emergencies.

In response to questions from Director Christina Catsavis, Police Chief Danny Baker said he is concerned about public safety because of budget reductions. The budget lowers the number of authorized officers from 168 to 160, with the department now having 155 officers. Martin applauded Baker for how he worked through the budget process, and encouraged other board members to be flexible during the year and “make changes where we need to make changes” and possibly consider restoring some or all cuts to fire and police budgets if financial conditions are favorable.

Directors George Catsavis, André Good, Lee Kemp, Martin, Rego, and Kevin Settle voted for the budget, with Director Christina Catsavis opposing.