Highlights of the Fort Smith Board of Directors Meeting 10/4/22

The Fort Smith Board of Directors voted unanimously to authorize issuance of up to $115 million in industrial revenue bonds for a new manufacturing facility at 5401 Excelsior Drive and up to $23 million in bonds for construction of a 420,000 square ft warehouse facility at 5101 Excelsior Drive , both for Owens Corning Composite Materials. The expansions will lead to the creation of 5 new jobs with an average wage of $85,000 per year. The benefit to Owens Corning of using the industrial revenue bonds is a savings of 40% on their property taxes over the next ten years for a total of $5.4 million in savings. Owens Corning (not the City) would be responsible for debt service and repayment of the bonds.

Director Dawson and Mayor McGill both praised Owens Corning for their investment in Fort Smith. Settle also praised Owens Corning and praised the City being involved to help nurture economic development.

The Board voted unanimously to issue Westark Taxi a license to operate a taxi service. The owner of Westark Taxi, Jerry Burnett, is also the owner of Payless Taxi that currently operates in the city at the same address as Westark Taxi will. Burnett explained that because his insurance company, Progressive, limits their coverage to a maximum of 5 vehicles, to expand service by offering more cars, they have to start the new second company. This would allow his cab companies all together to have a total of 10 cars plus the 3 owner operated vehicles. Burnett’s goal is to someday with both companies and owner operated vehicles be able to have 10 cars on the road for day shift and 10 for night shift but he said that the lack of good quality drivers (commonly because of the requirement to pass a drug test) is a barrier to achieving that goal.

Director Dawson asked if the fare charges will remain the same. Burnett answered that they will and that he’d like to be able to convert to a meter based system but that that is not allowed by the City.

Inspired by the discussion but not related to the Westark Taxi issue itself, Director Morton reminded of a 2019 issue with an accident where a local taxi from a different cab company that is no longer in business hit a driver and she was injured but the company was not insured at all because a state regulation that allows for companies with 25 or more vehicles to self-insure and the State did not follow up diligently to assure that the company had the ability to pay the claim. He asked City Administrator Geffken and City Attorney Canfield to study the possibility for instituting higher commercial vehicle liability insurance requirements for cabs in the future.

The Board voted unanimously in favor of a change in the Unified Development Ordinance that would allow for tattoo and body piercing shops (currently allowed in C3, C4, C5, and C6 commercial zoning districts) to also be automatically permitted in C2 zoning districts. C2 allows for other personal services including barber shops, salons, and massage facilities.

In the longest topic of discussion of the night, the Board discussed whether to approve changes to the Unified Development Ordinance regarding zoning for mini-storages. The amendment will allow for mini-storage facilities to only be permitted in Industrial Light, Industrial Moderate, and Industrial Heavy zoning districts (currently they have been also allowed in Commercial Heavy districts). Approval by both the Planning Commission and the Board of Directors will be needed for all mini-storages. There will also be added stronger design requirements for mini-storages including roof and wall articulations, a decorative 8 ft high screening wall, and limiting vehicle storage to only the rear of the site. Wording will be added for separate listings for indoor climatized facilities and for outdoor non-climatized facilities.

Joshua Niles who has applied for a business license and has been planning for an 26,000 square ft indoor mini-storage in a C-5 zone spoke. He said he has incurred $39,000 in cost so far and would like to “beg to be grandfathered in”. Director Rego apologized to Niles for the Board adding to the “angst and difficulty” of opening a business and causing him anxiety over the matter. Director Morton called the area where Niles’ facility would be located (opposite the Tackle Box on Zero near where Elevate Trampoline Park is located currently) an industrial area and the 3.2 acres involved a small piece of land and expressed his view that it would be an appropriate place for a mini-storage.

Fort Smith resident Jackson Goodwin, a civil engineer, spoke in opposition to the proposed change. He said the UDO requirements are already “pretty stringent as it is” . He expressed a worry that more restrictions, especially those that raise the cost, would make developers consider locating outside the city (like in surrounding areas with looser rules like Barling) instead of in Fort Smith. He said that C-5 should include self-storage facilities. He opposed the requirement for plans to go to the Board for review because developers would have to spend “close to 6 figures” on architectural and engineering plans. He said that no other specific types of developments currently have to always bring full-fledged plans to the Board for approval and that it would be a “bad precedent to set” to require submitting full plans.

Dustin Cahearn spoke in request of at least being grandfathered in to the new requirements. He has plans to construct a mini-storage facility on 15 acres of land at the bottom of exit 13 near Fianna hills. He has already invested $300,000 in the project. Because the State (for environmental reasons) requires State approval to clear more than 5 acres, Cahearn has to go through State approval before beginning the city Planning approval process.

Director Morton expressed not being comfortable with the idea of the size of a 15 acre facility at the location on Jenny Lind near a residential area and where he felt the land could be better used for additional retail or housing space. Director Morton shared his feelings that we do not have enough land in Fort Smith and are going to have a “gigantic problem in two or three years”. He did say, though, that the money Cahearn has already spent is “definitely a concern”. Director Dawson expressed that she felt changing the rules after Cahearn had spent so much money was unfair and she felt like “we can’t do that ethically”.

Administrator Geffken and Planning Director Rice offered up that it might be an option to add an effective date into the ordinance to help people who have already have been planning and investing in mini-storages that would be affected. Rice mentioned that in addition to the 2 concerned prospective mini-storage owners who spoke at the meeting that she was aware that Planning had been contacted by an additional 4 or 5. Morton expressed worry that there would be a rush on building/planning mini-storages between now and the effective date. Director Dawson suggested maybe a dollar amount investment threshold for people who have already spent money to be grandfathered in.

Director Rego spoke against the proposed UDO changes saying that they would make it harder for businesses investing in Fort Smith. He called it an “attempt to micromanage despite what the market is showing as a need for those facilities” and a “solution in search of a problem”.

Director Morton argued that the Board has an “obligation for the future” and that there is going to be a need for more retail and houses if the F-35 project comes here. He said we “don’t need 7 more huge land eating” mini-storage facilities. Dawson said of Cahearn, “We just need to grandfather him in regardless of what we do in the future”. Director Settle mentioned that the UDO changes don’t preclude developers requesting a change to their property to Industrial zoning to allow for them to have a mini-storage. He spoke in support of grandfathering in the developments already invested in. However, he spoke critically of mini-storages “taking vast land for something that just sits there” and that he doesn’t want the city to ”turn into mini-storages and banks on every corner”. He expressed support for adding a time table for developers to start the planning and building permitting process.

Director Catsavis spoke in opposition to the new regulations costing developers more money. Director Settle argued that other large cities including those in Texas have restrictive zonings. He favored more stringent zoning requirements saying “We want our city to look great”. Director Catsavis expressed his agreement with Director Rego.

Directors Rego and Martin suggested setting a time line to make sure that people to “have opportunity to instigate the process”. The Board voted unanimously in favor of amending the ordinance to grandfather in any development that has started the development process (either by having submitted for a building permit or Planning commission approval) by January 1, 2023.

Then the Board voted on the changes to the ordinance as amended (including the grandfathering in of everything initiated by January 1). Director Rego voted No and the ordinance passed with all of the other Directors voting in favor.

The Board voted on raising the limit for damages paid as a consequence of trees that are in a City controlled right of way falling onto and destroying private property. The Board recently voted to pay up to $500 for repairs. Director Martin discussed that the citizen with the damaged fence who originally prompted the added liability payment was not happy with the $500 cap because with the rising costs especially of lumber that it would not cover the repair needed. The proposed increase would raise that limit to $2000. Martin called $2000 “an appropriate amount to cover” and “in the grand scheme of things not significant” but to the homeowner “significant”. He also pointed out that the policy’s start date still left the homeowner who originally prompted the issue still uncovered and said that he would like to grandfather that individual in. To make the coverage available earlier to cover that person, Director Morton motioned for an amendment to make the policy effective January 1, 2022. That amendment passed unanimously.

Director Morton asked what the city policy is on dead trees in city rights of way and whether we take action on them. Utilities Director McAvoy answered that if the easement is utility department owned we take dead trees down. Director Settle asked if we could make the fallen tree damage claims a budget line item to help keep track. Geffken responded that he would.

The Board voted unanimously to approve the higher payout limit and to make it effective January 1, 2022.

The Board voted unanimously to authorize the city’s property tax millage of 8 mills to be collected in 2023. This would result in no change in the tax rates. The City collects 5 mills for the general fund, and 1 mill each for the library, Fire retirement, and Police retirement. These rates are at the maximum allowed by state law except for the library. Geffken called this re-approval of the rates “standard from year to year”. Director Catsavis reminded that this an existing tax not a new tax and “not going to cost any more money”.

In the second longest discussed issue of the night, the Board voted on a resolution directing the City Administration and City Attorney to initiate the actions to file an appeal to the Supreme Court of the Eight Circuit Court’s recent ruling regarding the consent decree that was not in the City’s favor. The appeal being denied means that the City will be required to repair or replace all sewer pipes rated 4 or 5 on the National Association of Sewer Service Company scale. If the City had won the appeal, Fort Smith stood to save $140 million.

City Attorney Canfield said the Supreme Court’s “likelihood to review a contract interpretation is almost nil”. He mentioned as alternatives asking the panel that already ruled on the case to reconsider or petitioning for the review of the case “en banc”, by the entire 8th Circuit Court instead of just the original 3 judge panel. He said however that there was very little reasonable expectation of changing the decision of the panel or of reconsideration by the court en banc. He said there was “not a great deal of opportunity for success”.

Director Settle said we should “keep fighting” and that the consent decree is “gonna get unaffordable real fast” and “legal fees are cheap” in comparison. He reminded that when the original consent decree settlement was accepted the Board then was afraid to spend a million dollars to fight it in court. Of spending on the current legal situation, he said “What do we got to lose?”.

Director Good agreed with Director Settle on that “fighting sentiment” and Settle’s feeling that the federal government has not been making this fair and easy on us saying “Someone has it out for us or just isn’t listening”. But he also mentioned that back when the Board originally chose to settle rather than go to court, not wanting to make things worse with the federal government was a big reason for the decision and that appealing it now would also possibly still not be worth upsetting the federal government even further.

Director Morton pointed out that the Supreme Court only hears 1% of the cases. Everyone he talked to said the Supreme Court would not hear this case. He said in conversations with the attorney representing the City in the consent decree case and with other lawyers that they could not find basis to file an appeal concerning a contract dispute between two parties with no appreciation beyond the borders of the City of Fort Smith. He also said that asking the full Circuit Court to hear the case is usually done when there is a split in the panel vote but this decision was a 3-0 vote in favor of the federal government. He said “At the end of the day, it’s a losing argument” and expressed his view that it was unlikely the full court would overrule the ruling. He added “Why waste the money asking for full appeal? Just say we tried our best” and we “need to start planning to get the consent decree completed”. But he added that the consent decree is a “terrible thing for the citizens to be stuck with.” saying “There is no good path. There are no good answers.”

Director Rego agreed with Director Morton. He added that the 9th Circuit Court takes the most en banc appeal cases of any of the Circuits and last year of the 972 requests they received they only heard 12 of them. He said he “would like to see us transition away from legal avenues on this”.

Director Geffken talked about having meetings with the EPA and DoJ and that there had been some improvements. At one point, there was a feeling from the federal government that the city was being unreasonable and “just wanted to walk out of the consent decree”. But at times there had been improvement on that perception. He did not sound positive that relations with the federal government were still on a continued upswing and expressed uncertainty with the situation but still called it “hopeful”.

Mayor McGill spoke in opposition to the appeal based on having had recent talks with representatives from the EPA that were very positive. He expressed his view that partnering with them rather than aggravating them by going to court was the best plan saying “I Propose we work alongside of them and let them give us guidance”. He said “the consent decree will take care of itself”. He asked the Board to vote No on the resolution.

Director Settle expressed frustration with hearing “lip service from the EPA” and said “Till I see something from them it’s the best legal avenue we have.” Director Settle made a motion to amend the resolution so that it no longer was to appeal to the Supreme Court but rather to seek reconsideration from the 8th Circuit Court panel or en banc. The motion died without going to a vote due to lack of a second.

The Board voted on the original resolution. It was defeated with Catsavis and Settle voting in favor of the resolution and all the others opposing it.

The Board voted unanimously to approve a contract with Forsgren for $2,302,843.02 for 1.5 miles of street overlays/reconstruction.

Unrelated to this specific set of street overlays but inspired generally by the mention of street overlays, Director Morton sparked a discussion by expressing his enthusiasm for street overlays. He suggested that 2023 capital improvement plans include more street overlays specifically mentioning the need for some on Jenny Lind at the top of the hill. Director Martin chimed in adding the need on Greenwood and Old Greenwood. Martin said “If we get those major thoroughfares people would be a lot happier”. Of public popularity of street overlay projects he added “Roads they see. “ He called street repair projects “Very visible” and said they “can go a long way to help our folks”.