Agenda Highlights 3/18/25

At the Fort Smith Board of Directors meeting scheduled for 3-18-25, the Board will vote on whether to reallocate funding so that the Mayor, Board of Directors, City Administration, City Clerk, and Citizen and City Services Department are all funded from only the General Fund (instead of also being funded using allocations from the Streets Maintenance Fund, Water and Sewer Operating Fund, and Solid Waste Fund). This reallocation was suggested by Director Settle at the 1-28-25 meeting. The reallocation is proposed primarily to allow the funds being allocated from the Water and Sewer Operating Fund for those five other budgets to remain in the Water and Sewer Operating Fund.

Based on the 2025 Budget, the reallocation would cause the General Fund balance to fall to 11.2%, well beneath the 20% contingency reserve threshold required by City policy at which measures must be taken including capital projects must halt, followed by budget cuts, and even lay offs if required to get back up to the 20% threshold.

While the reallocation would be an improvement toward the debt service coverage ratio that is currently a concern for the Utilities Department, it still would not be enough to achieve the bond rate covenant requirement of 110% debt service to coverage.

Chief Financial Officer Richards advises against the reallocation. He expressed concerns about the added burden on the General Fund saying that the “General Fund is currently operating in a structural budget deficit which is not sustainable long-term.” He suggests instead making cuts to the 2025 budget or placing spending holds and then considering revenue increases until there is enough money to fund the debt service and meet the bond covenants.

The Board will vote on contracting with MAHG for $251,064 for architecture services for the renovation of the existing building at 4501 Burrough Road to turn it into a consolidated 911 call center. All of the funds needed for the design and construction will be from E911 Funds transferred from the County to the City and the City will own and manage the facility.

The Board will vote on contracting with TLS Group for $1,812,317 for upgrading 19 traffic signals and Rogers and 6 on Phoenix from old video detection systems to new more reliable radar detection systems to help traffic flow.