Fort Smith boss says budget-cutting process his idea

Fort Smith City Administrator Dennis Kelly denies claims he is telling city employees that possible pay and benefit cuts are being demanded by the Fort Smith board of directors.

On June 23, Kelly issued a memo to all city employees letting them know the city faces a $412,117 shortfall in the general budget. The memo set out a series of meetings between June 28 and July 8 to seek their input on how to cut the budget. Budget-cutting choices outlined in Kelly’s memo include letting the city make up the shortfall by reducing the amount paid for employee benefits, requiring employees to take unpaid days off, possibly once a month, taking a pay cut, or by eliminating positions through layoffs.

City Directors Gary Campbell, Andre Good and Kevin Settle expressed concern that Kelly was blaming the board for the drastic options and/or aren’t comfortable with Kelly’s approach to the cost cutting. Also, several sources told The City Wire that Kelly is saying the city directors said the public should see the city employees face some of the same tough decisions faced by private sector workers during the national recession.

“I have been very, very specific (in the employee meetings) that this is my initiative,” Kelly said Thursday (July 1), adding that the memo and meeting process is “and old practice I’ve used for years.”

Kelly said he has talked to only one city director about the memo and meetings with employees and that director was pleased with the process.

However, Kelly did hear concerns from one city director during a Tuesday (June 29) board study session. City Director Settle directly told Kelly he disagreed with the process, saying, “We need to look at other areas first.”

The City Wire also received reports that Kelly was indirectly blaming the city’s deficit on the Fort Smith Convention Center.

The city of Fort Smith faces a shortfall of between $750,000 and $1 million to operate the Fort Smith Convention Center. The board spent more than 18 months trying to come up with a solution to plug the annual deficit. A state turnback program ended June 30 from which the city has received about $1.8 million a year. In 2010 the city will receive only $888,723 in 2010. With reserve funds, the deficit is not likely to be a problem until the 2012 budget cycle.

Kelly said employees are asking questions about the convention center, but he is letting them know that the convention center does not have anything to do with the existing deficit issue. Convention Center Director Frankie Hamilton supported Kelly’s assertion, saying he “did get a little flustered” during a recent meeting trying to explain the convention center funding issue but did make it clear that the deficit is not about the center.

“But I really think a lot of the employees really think the convention center is causing the deficit.  … That deficit (caused primarily by declining sales tax collections) has nothing to do with us,” Hamilton added.

Kelly said city employees have provided several “good ideas” for cost cutting, but he wouldn’t provide examples.

“There have been some very, very good questions from the employes and some very good ideas … We’ve been taking those to heart” and will include in the report, Kelly said during a Thursday afternoon interview.

Kelly said City Human Resources Director Richard Jones is compiling information for a report to be presented July 13 to the city board. The board packet with the report will be available July 9.