Director debate likely on proposed budget cuts

It’s not likely that Fort Smith City Directors will quickly approve a budget cutting plan by the city staff that would be necessary to implement in the event voters reject a 1% prepared food tax.

Fort Smith City Administrator Ray Gosack on Monday (Aug. 29) released a plan drafted by city staff that would cut $317,900 from the Fort Smith Police Department budget and $202,600 from the Parks Department to help cover an estimated $800,000 shortfall with the Fort Smith Convention Center.

A 1% prepared food tax was originally enacted by the board in February as a solution to an annual deficit with Fort Smith Convention Center operations predicted to occur when $1.8 million in annual state turnback money dried up. The state turnback program—which supported expansion or construction of tourism facilities — ended for Fort Smith in June 2010. The center has since operated on a reserve fund. A 1% prepared food tax is estimated to raise about $1.8 million annually.

The board changed direction on the tax after months of public uproar. In a July 28 special meeting, the board unanimously voted to repeal the original food tax ordinance, re-enact the tax, and send the measure to voters in a Nov. 8 special election.

Fort Smith City Director George Catsavis, who has opposed any tax plan to support convention center operations, says 30% should be cut from the about $700,000 convention center personnel budget. To generate more revenue at the center, Catsavis also said the convention center should be allowed to sell liquor, manage concession’s, install a ticketing system and raise the percentage charged to catering companies. He estimated his ideas would generate about $400,000 a year in revenue.

“This is just an estimate but it should be close, this should be considered before any budget cuts are considered,” Catsavis noted in an e-mail. “Also I will not accept any cuts to the police and fire (departments) to fund the (convention center), period. My thoughts are the people of Fort (Smith) want the city to be accountable as to how their money is managed and spent.”

Director Pam Weber wants to further study the budget and the budget-cutting proposals “before I make any suggestions on my own.” She also rejected the notion that the “pretty severe budget cuts” required if the 1% tax does not pass is a scare tactic.

“I don’t think that is true. I think what we are facing is a new reality. … The budget has been cut several times in recent years, and it is now pretty tight,” Weber explained. “Every cut that is going to be proposed is going to affect every citizen.”

Director Philip Merry Jr. believes the about $25,000 spent to televise board meetings should also be on the option list for budget cuts. He also suggests the board should consider a 1% across-the-board cut of the city’s $42 million general fund budget. Merry said he is “ready to do the necessary” cuts, but said passage of the 1% prepared food tax would “avoid a series of cuts that would be so unfortunate.”

Director Steve Tyler said the general fund cuts proposed by the staff may be tweaked, but represent the best option to meet the convention center funding shortfall.

“Each Director will have their priorities but I think the pain can be spread between departments and categories,” Tyler said.

He also doubts anyone will have the stomach to push for renewal of Fort Smith’s business license fee. The fee has been estimated to raise about $1.9 million annually.