Business leaders: Trust issues, poor messaging doomed 1% tax

Editor’s note: The City Wire will post later today the election result comments from members of the Fort Smith Board of Directors.

Early response from the Fort Smith business community about Tuesday’s overwhelming voter rejection of the 1% prepared food tax appears to center around a common theme: There is a disconnect between citizens and the city leadership.

A 1% prepared food tax was originally enacted by the Fort Smith Board of Directors in February as a solution to an annual deficit with Fort Smith Convention Center operations predicted to occur when $1.8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 board changed direction on the tax after months of public uproar, which included a petition drive to force the tax to an election and a court hearing that essentially overturned the city’s rejection of the petition drive. 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.

On Tuesday, 62.7% of voters (5,619) were against the tax. Of the 40,914 eligible voters, only 9,010, or 25.04%, voted.

BUSINESS RESPONSE
The City Wire sent the following questions to a randomly selected group of Fort Smith business leaders. (The recipients were given the opportunity to remain anonymous with their responses.)
• What reasons do you give as to why the 1% PFT was so overwhelmingly rejected? (And please feel free to note what the Board of Directors might do in the future to address the reasons you mention.)
• Do you believe another attempt within the next 1-2 years should be made to seek voter approval for a prepared food tax to support the convention center operations?
• Early commentary from citizens about the failure of the tax to pass appears to indicate a lack of trust and/or communication between city leadership (Board, top city staff) and citizens. Do you agree with such commentary? If you do agree, what would you suggest is the remedy to the problem?

“I think the most frustrating piece of this is that people do not honestly feel that we are moving forward in a positive direction,” noted Rob Coleman, owner of vice president of ERC Properties. “I agree that there is a barrier that has been set up between a large population of the citizens in regards to the trust they have for the current City Board. I also feel that some of this is misdirected as most of the so called problems that exist are from years of leadership without vision, not from the current individuals that are in the City government.”

One of the anonymous responses noted: “Certainly there is disconnect between city govt. and the citizens of FS. The way this initiative evolved from ordinance to a vote compounded the problem. The city did not do itself any favors letting this be handled as it was.”

Another anonymous responder said the city failed to adequately explain the “complete issue and ultimate impact” of not adequately funding the convention center and having to pull funds from an already tight general fund budget to support the center’s operations.

LEADERSHIP VOID
Travis Stephens, who once ran for a spot on the Fort Smith Board of Directors and is now head of the Clarksville-Johnson County Regional Chamber of Commerce, blames the failure on poor messaging.

“Essentially there was not a clear and concise message emanating from the city. There were questions about how much money was really needed to fund the Convention Center and where the extra funds would go,” Stephens wrote. “Additionally, there were comments made by city officials about not having the confidence in the people to approve the tax in a general election, and that the Convention Center would remain in operation with or without the PFT. With so many unknowns and mixed messages it was hard for voters to buy in to a new tax. Trying to pass the measure without voter approval and the subsequent battle over ‘technicalities’ regarding the signatures certainly didn’t win any neutral residents to the city’s side either.”

Ed Devero, a former member of the Convention Center Commission, suggested the current group of city leaders are haunted by the ghosts of decisions past.

“There has been a void in leadership the last ten years and it is now showing. We have an excellent Mayor, Board, City Manager and staff in place for the first time in many years. Unfortunately they inherited a mess and it appears it will take a long time to regain the trust of the people. This was not a vote against the Convention Center. This was a vote against the past,” Devero said.

LOCAL ATTITUDE ISSUE
Greg Carman, with Fort Smith-based trucking firm Carman Inc., was more succinct with regard to the relationship between citizens and city leadership.

“Our city leaders displayed, especially early on, a very condescending attitude. They need to realize and act like they serve the people and not the other way around,” said Carman, who admitted to begrudgingly supporting the 1% prepared food tax.

But Carman also provided a recipe for regaining citizen trust and adequately funding the convention center: “Going forward, present a clear plan with all reasonable questions and possibilities answered and planned for. And do it in a way that honestly and patiently addresses criticism.”

Stephens suggests the rejection may be the result of local political phenomena rather than an overall anti-tax mood.

“I think the list of why (the tax failed) is a very long one. But I know for sure it was not due to the timing and it was not due to the current state of the economy. In a recent Forbes article published on October 6th of this year it was pointed out that despite these ‘tough economic times’ voters in Arkansas communities have approved tax hikes in 16 of the last 18 communities to propose initiatives. And just yesterday (Nov. 8) the city of nearby Clarksville approved a 1 cent sales tax increase to fund a new aquatics center and new police and fire stations,” Stephens said.

ANOTHER SHOT AT THE TAX?
But should the 1% prepared food tax — or any other percentage — be brought back before the voters within 1-2 years? The answers were mixed on this question.

“I do not,” said developer Coleman. “I think that we need to focus on what we can be successful at and put our efforts there. The convention center is a great idea and can be a large benefit to the City in theory, but it is draining our resources and preventing us from maximizing our funds towards needed basic services. I would support the move to sell the Convention Center to a qualified corporation and move towards focusing on the redevelopment of downtown, riverfront and urban core improvements to better our City for incoming industry.”

One anonymous reply suggested that conditions could change that would favor another ballot question.

“I think there will be a change in the political climate in about a year from now. After that, the City may want to hire a public relations or political consultant firm to approach the tax matter.”

Devero believes the tax must be pursued.

“This is about investing in our community. Unfortunately the (convention center) became the scapegoat for poor decisions made in the past. We must as a city understand in this 2011 world that we are living in if we do not invest in ourselves no one else will,” he explained.

Stephens took a more compromised approach to the question.

“The argument for having a convention center is much stronger than the one presented by the ‘no taxes now or forever’ crowd. A 1/2 cent allocation may be more palatable for voters as well, but the city may need to gain some momentum with a separate issue before coming back to the voters,” Stephens noted.

‘LONG ROAD TO REDEMPTION’
Continuing, Stephens offered a deeper explanation of his opinion on gaining political momentum: “Right now there is a very definite feeling of ‘mistrust.’ This is a feeling that has built up over time due to a variety of errors and past decisions that have been made. And although the vast majority of the personalities now involved are indeed new to the scene, they are not simply going to get the benefit of the doubt. There is still a sentiment of ‘you have to earn our trust before we will follow you.’ Two elements are going to be needed to reverse the current attitudes, which are also the same two elements that lead us to this point. They are Time and Opportunities. For the city government to win over the people they need opportunities in the way of community problems to solve and they need to solve them in a way that the people appreciate. Unfortunately, we do not even know what those opportunities are yet and it will take time to encounter them. So the city of Fort Smith may be in for a long road to redemption.”

While Coleman is frustrated by the lack of leadership capable of developing and pursuing a clear community vision, he is hopeful.

“In my opinion, this is by far the best Board of Directors that we have had in quite some time and I look forward to seeing what success they can have with the support of the citizenship of Fort Smith,” he said.