The Fort Smith Board of Directors passed a Fiscal Year 2014 operating budget at its regularly scheduled Tuesday (Dec. 3) meeting without much of the fanfare and disagreements seen during the last month of budget meetings that included one budget scenario that would have resulted in the layoffs of 14 city employees.
At issue during the last three meetings dealing with the now-approved budget was the city's use of previous year's ending balance in the upcoming year's budget, which has the city spending more than $2 million more than it brings in in revenues.
City Director Keith Lau has contended that such budgeting showed the city operating at a deficit based on revenues. The budget for next year has expenditures of $47.919 million and revenues of $45.716 million.
All members of the Board with the exception of Lau voted in favor of approving the original budget as proposed. Speaking before his no vote, Lau said he could not vote for the budget in good conscience.
"I just want to go on record as being opposed to this budget. I think that we haven't gone far enough to cut our expenses or increase our revenues – a $2.2 million difference between revenues and expenses."
City Administrator Ray Gosack said even with all the back and forth regarding the budget, the process served its purpose for the Board, which could result in changes when the city begins work on the FY2015 budget later next year.
"It served a very good purpose for the Board because it's made them more aware of the fundamental assumptions that go into balancing our budget and I think what they've indicated is they want to make sure they understand those assumptions and possibly modify them for the 2015 budget."
The Board also approved raising fares on the city's public transit. According to a memo from Transit Director Ken Savage, the rate increases approved include:
• Fixed Route - $1.00 to $1.25 per trip;
• Demand Response - $2.00 to $2.50 per trip;
• Additional Services - $3.00 per trip (demand response when fixed routes are closed; this is a new service);
• Private Charter-First Hour - $125.00 to $200.00; and
• Private Charter-Additional Hours - $65.00/hour to $100/hour.
In Savage's memo, he detailed the purpose for the rate increases.
"Higher fuel and equipment prices necessitate the need for the associated increases," he wrote. "Adjusting the rates would provide approximately $30,000 in (additional) revenues and would help establish equality among current rates for urban transportation services across Arkansas."
Area resident Pauline Novack spoke against the increase, saying it would price many transit users out of the system at a time when the economy is still struggling in Fort Smith.
The Board also declined a request from the Utility Department to acquire 3.59 acres of property along Navy Road through eminent domain. The property, which the Utility Department was attempting to acquire for $86,000, would have been used to construct a 3.5 million gallon equalization tank as part of the Mill Creek Pump Station project.
At issue was a request by the property's co-owner, Steve Beam, who said the city was not giving him fair value for the land, which he said is mortgaged at more than $200,000. He had asked the city to pay him $209,000 for the land, which would have also come with infill and gravel. Beam told the Board he would be willing to accept $146,000 as payment for the land, but Utility Director Steve Parke would not negotiate beyond the $86,000 offer.
With the eminent domain plan rejected, both parties will go back to negotiating this week with Mayor Sandy Sanders explaining that the city could possibly call a special session next Tuesday (Dec. 10) in association with an already-planned study session to vote on a resolution authorizing the sale in order to move the project forward.
Parke explained that the project is part of a fulfillment of a Department of Justice consent agreement associated to wastewater runoff problems dating back to the 1970s.
In other business, the Board:
• Approved an ordinance amending the zoning map at 1000 South Waldron Road to create a Planned Zoning District;
• Approved an ordinance amending the zoning map from 201 Riverfront Drive to 3201 Riverfront Drive creating a Planned Zoning District;
• Approved amendments to the 2009 Unified Development Ordinance;
• Approved an ordinance amending the 2013 operating budget; and
• Approved an ordinance establishing salaries and benefits and related procedures for city employees.