Fort Smith Board briefed on insurance savings, increases, and proposed smoking ban

Fort Smith city government has completed one year of insurance coverage under the Arkansas Municipal League (AML) for its more than $300 million in auto, equipment, and property assets. City Administrator Carl Geffken touted the success of the transition at Tuesday’s (Feb. 14) study session, revealing a savings in annual premiums of $155,670.

In March 2016, the city transitioned from Travelers Insurance, which had served the city’s needs for 15 years. The 2015-2016 insurance premiums with Travelers totaled $826,344, consisting of $408,101 for auto, $357,794 for property, $33,619 for equipment, and $26,839 for the “Fine Arts & Misc.” category. By comparison, the 2016-2017 premiums under AML totaled $670,674 ($390,603 property, $212,722 auto, and $67,349 equipment).

For 2017-2018, Geffken said, auto and equipment rates will remain unchanged while property will increase by 12.5% ($48,705 in additional premiums) due in part to the April 29, 2016 hailstorm that caused millions of dollars in auto and property damages throughout the Fort Smith metro area. Total premiums for the new year will be $287,770 for auto and equipment. As of Feb. 14, AML insures 542 vehicles and 328 pieces of equipment.

On the property side, AML premiums will run $523,057, the larger increase due in part to city assets which had been previously undervalued or unscheduled. For example, an insurance appraisal conducted by American Appraisal Associates (AAA) on properties valued at $750,000 or more found unscheduled assets like the Country Club Water Reservoir, valued at $1.476 million, while the Fort Smith Convention Center — insured for $27.58 million — actually appraises at $30.517 million. The net effect of the appraisals conducted by AAA to date is that city properties are underinsured by $62.7 million.

City staff and AML expect to have all city owned properties evaluated, appraised, and scheduled by the 2018-2019 renewal around March 1 of next year.

SMOKING VOTE, LEGAL REPRESENTATION
Also Tuesday, it was revealed the Board could vote on a controversial no-smoking policy for all city parks as early as next Tuesday’s (Feb. 21) regular meeting. Fort Smith Parks and Recreation Director Doug Reinert said he had received emails representing both sides of the issue, adding there were more in favor than against.

Of those who oppose the proposed ordinance — which was approved by a unanimous vote of the Parks Commission at last Wednesday’s (Feb. 8) meeting — the major complaints received by Reinert as well as City Directors George Catsavis and Mike Lorenz have been from smokers or from smokers and non-smokers, who oppose it on the grounds of it being “an overreach of government” or who feel it will be too unwieldy to enforce. Director Catsavis suggested designated smoking areas.

Fort Smith Mayor Sandy Sanders likened the issue to the restaurant smoking ban from several years ago that “sort of became a non-issue” and believed enforcement of the policy would largely be “self-policing.”

The Board also discussed revisiting the cost effectiveness of Fort Smith-based Daily & Woods for the city’s legal services. The Board did not decide anything at the session, but asked for additional information regarding pending litigation as well as comparative analysis to what other cities in Arkansas are doing (in-house vs. external, legal costs, etc.). The firm has worked with the city for around 40 years, a relationship that has cost the city an average of $350,000 per year for the last decade, Geffken said.