Fort Smith board rejects job cut proposal

A proposal by Fort Smith City Administrator Dennis Kelly to cut at least 20 jobs to cover the convention center cost was the proverbial lead balloon at Tuesday’s (Nov. 2) board meeting.

The proposal was part of a brief presentation of the proposed Fort Smith 2011 operating budget and general fund budget. The roughly $224.5 million budget, with all about about $40 million of that for large capital projects, is about 18% less than the 2010 budget.

The Fort Smith board of directors spent most of 2008 and 2009 trying to come up with a solution to plug the annual deficit. A state turnback program ends in June 2010 from which the city has received about $1.8 million a year. In 2010 the city will receive only $888,723 in 2010. A fund balance will allow the city to cover the convention center shortfall in 2011.

The board recently instructed the staff to draw up three referendum questions for a special election ballot:

• A half-percent prepared food tax to cover convention center costs only, and estimated to raise $900,000 annually;

• A 1% percent prepared food tax to cover convention center costs that would raise an estimated $1.8 million annually. The annual allocation would be $1 million for the convention center, $240,000 for a convention center maintenance fund, $250,000 for Marshals Museum operating costs, $60,000 for various festivals, $50,000 for Bass Reeves monument (2012 and 2013 only), and $50,000 for arts community (beginning in 2014);

• Reallocation of 0.5% street tax funds to cover only the annual costs to operate the convention center. The reallocation is estimated to raise about $943,000 annually.

However, the board has been hesitant to select a funding option or forward a funding option to voters.

Kelly said Tuesday that a “two-tier” approach to cut city jobs could raise the $1 million needed annually to operate the convention center. Kelly said each tier would require the loss or lay off of at least 10 jobs each with an annual salary of $50,000. The board would approve the implementation of each tier, and funding freed up from the cuts would not be needed until July 1, 2011.

An alternative to that would be a 2.26% salary reduction across the board that would save about $1 million, Kelly said.

Kelly reminded the board that the city has already cut equipment replacement, training, travel and other non-personnel items to address almost $800,000 in revenue shortfalls during 2010.

“We’re down to the bone,” Kelly told the board. “The only thing you’ve got left now is personnel.”

Kelly’s proposal was not popular with Fort Smith Mayor Ray Baker and the board.

“I do not think it’s right to tie salaries to the convention center,” Baker told Kelly. “We don’t need layoffs and we don’t need salary cuts.”

Baker advised Kelly to come up with other options, to which Kelly reminded Baker that many options have been presented in the past two years. To that, Baker said the board will “have to bite the bullet” and make a decision on the options.

City Director Gary Campbell, who did not seek re-election and will rotate off the board in January, told Kelly he was “absolutely shocked” that Kelly’s proposed cuts in the 2011 proposed budget are “aimed at employees first.” Campbell suggested there are many other areas — like a $35,000 fireworks budget — that should be cut.

Campbell’s sentiment was shared by City Director Andre Good, who said there was “no way” he would support personnel and salary cuts without first cutting the “feel good” things from the budget.

Going further, City Director Kevin Settle asked Kelly to provide the board a list of cuts to “non-essential projects,” like mowing the Interstate 540-Rogers Avenue interchange and the fireworks budget.

Budget hearings are scheduled for Nov. 8, Nov. 9 and Nov. 15. Each hearing will begin at 6 p.m., and will be held in the Community Room of the Fort Smith Police Department.