Highlights of the Fort Smith Board of Directors Meeting 1/23/24

The Fort Smith Board of Directors study session meeting held 1-23-24 and led by Vice Mayor Rego with the Mayor and Director Settle absent, began with a presentation from Shane Sengalli from Houston based Water Company of America to discuss a potential contract with the City for Water Company of America to review the water and sewer utilities billing system to try to find ways to recapture lost revenue including finding unbilled and misbilled utility services. The main types of missed revenue typically found include faulty meters, accounts billed for water but not sewer, wrong rates being charged, and broken valves. Under the proposed contract WCoA would be paid 50% of increased utilities revenues for 4 years following the action taken on a finding. Sengalli said that WCoA would be paid 50% of any revenues brought in from back billing from the findings, but Utilities Director McAvoy clarified that that would not apply in Fort Smith because Fort Smith does not do any back billing of customers at all. The City would only be charged if WCoA finds lost revenue, but the company’s previous performance in other cities indicates it would be unlikely for them to report not finding any at all. Based on the average findings in other cities, Sengalli estimated that Fort Smith might possibly be able to have $300,000 annually in missed revenue from the findings. The investigations tend to take between 3 and 24 months to complete.

Director Martin expressed his view that the analysis that WCoA would be doing is “what we should be doing.” and that the City should have everything they are offering already “in place today” with our existing analytics team and internal auditing.

Utilities Director McAvoy said “This program has its place.” but said the City still has a lot of things that they are working towards including the high number of meters that the City knows still need replaced and that the whole system does not have AMI meter reading yet. He called the WCoA program a “really cool program” however, he said “But, we’re not ready for it yet.” He suggested that the City complete a lot of their existing and planned efforts first and then bring WCoA in later to fine tune.

Director Morton talked about the type of analysis service WCoA provides being utilized by businesses and said that at his previous job he saw that company hire outside firms to do very similar functions related to taxes and that 80% of the time the firms came back with findings. He also said that charging 50% of the increased revenue is taking a higher percentage than he typically saw being charged.

Director Morton asked if the findings are typically more common in residential or commercial and industrial accounts. Sengalli answered that the highest number of findings are residential, but 90% of the dollars in revenue are found in commercial and industrial accounts.

Director Morton expressed concern about cybersecurity issues from allowing WCoA access to the billing system. Sengalli said that they would only need read-only access. He said that they need a live link to have up to date rather than “stale data”. He said that there have been instances where other Cities denied them access to a live link and that they were able to work with a bi-monthly download but he called that situation “not ideal.”

Director Christina Catsavis shared Directors Morton’s concerns about cybersecurity. She said “I can’t imagine giving an outside vendor access to the system” and that even read-only access is a security risk. McAvoy said “I would agree.” and mentioned that WCoA would need to be able to see the work order software and that that poses an especially worrisome risk.

Director Morton said that when he was first on the Board 5 years ago, there were 10,000 new meters not installed and that those 10,000 meters have still not been installed today. He said that he sees “no reason to wait on this as long as we can protect it on the IT side.”

Director Good said that he is a “proponent of generating revenue” and that while the program “sounds like a great thing” he expressed concerns about the negative perception from the public of increasing bills, especially at this time when water rate increases may also be enacted soon. Sengalli said “I completely understand.” but argued that hiring someone to make sure that everyone is paying their fair share may be perceived by the public as being good stewards of their money. He said that it is “all about accountability and rate payer equity.” Sengalli said that while some customers will see bill increases, most will not.

Director George Catsavis asked if the program would look into customers who are being overcharged. Sengalli said that because that is not a revenue source for them they are “not looking for that” but that if they happen to find a faulty meter that is overcharging someone they will mention it to the utility department.

The Board discussed the business fees implemented in 2018 that go to the Police Department. The fees are $100 per year for all businesses except for mobile food vendors whose fees are $150 per year and various additional fees for businesses with alcohol licenses. In 2023, 3554 business licenses were issued with 548 of them being new applications. Payments from business license fees brought in $359,520. Late fees for business licenses brought in $78,700. The Police Department has used the funds from businesses licenses to fund purchases of an Incident Response Vehicle, police and detective vehicles, and Animal Control vehicles and equipment and also to help fund a 24% pay raise for Police Department Employees.

Director Catsavis mentioned that when the business license fee was waived for a year during Covid and then reinstated that he has heard that some businesses did not get notification of the reinstatement and were surprised with a large bill. One business, Johnny’s Transmission, received a bill for $750. Planning Director Rice said that the situation for that particular business was the result of 4 years of unpaid business license renewal fees and late fees adding up.

Expressing a desire for a “level playing field” and all businesses operating within the city (both those based in town and those based elsewhere) operating with a current license, Director Morton suggested that utility bills be cross checked with business licenses. If a business has a utility account, it should have a corresponding business license. He also mentioned that projections of how much money would be raised from business licenses when they were originally instituted “haven’t come to realization.” Director Martin agreed with Morton on the gap between the expectations and the revenue saying that originally the fees were expected to bring in $750,000 per year and currently only bring in about half that.

Utilities Deputy Director of Business Administration Joshua Robertson presented an update on the Climate Pollution Reduction Grants process in which the City (in partnership with the State, WAPDD, Frontier MPO, Metroplan, and NWA Regional Planning Commission) has applied for an up to $4.3 billion dollar grant from the EPA for regional programs to mitigate greenhouse gas emissions. The EPA awards the grant money to the State and the State disperses the money to pay for individual programs that have applied for the funding. As part of the process, there was outreach to the community including a survey. Out of the total of 1000 responses to the survey, 300 of those were from the Fort Smith area. The top results about the priorities of the respondents to the survey were trees & natural areas, complete and green streets, zero-energy buildings, materials management and recycling, sustainable farming methods, connected communities, and transportation choice

The grant process is currently for the planning phase, and the deadline for application submission for the next phase is April 1, 2024. Robertson said that the planning done for the grant can be used to build an official Sustainability Plan that will be ready and on hand for other grant funding opportunities. He also said that a Sustainability Plan can help Fort Smith become a “Green City” and that may help in attracting businesses that look for that.

Robertson also presented an update on the Energy and Environment Innovation Action Plan that was submitted as part of the application process for the grant. Current projects already being worked on include a large scale solar plant, airport solar & energy efficiency, electric Transit buses, electric vehicle charging infrastructure, complete streets, land conservation via expanded parks and trails, a City owned recyclable materials recovery facility at the landfill, and workforce development and public education. Upcoming potential projects include small scale solar for public parking lots and parks, light rail transportation for the metropolitan area, weatherization and solar and E-bike program expansion for low-income and disadvantaged communities, and port operation enhancements for energy efficiency.

Director Christina Catsavis inquired about the term “complete streets.” Robertson clarified that that is streets that are designed not just for cars but also include sidewalks, bike lanes, and possibly even some green areas right off the street.

Director Rego called the plans “sensational” and the presentation “very thorough, informed, and informative.” He asked when they might hear if grant funding was awarded. Robertson answered that this grant funding will be awarded in October of this year but that he also anticipates more other environmental grant opportunities being announced in the 4th quarter of this year.

Director Morton asked Robertson if he has the resources needed to get everything in for the application for the next phase by the April deadline. Robertson seemed to express a little bit of concern that he is “doing it on his own” but said that he has been reaching out for support and using successful applications for similar grants as templates. Director Morton suggested that he reach out to the League of Cities and take advantage of their free expertise.

The Board heard an update from newly elected Fort Smith Animal Haven Board President Mike Ballman regarding the shelter’s new location and current activities and goals for this year. Ballman has been President for three months and comes from a background in engineering and mentioned using his “data driven” approach to improve the shelter.

At the end of November, the shelter relocated from their previous location at 4800 South 46th because their lease was going to lapse to a new location, the former Fort Chaffee motor pool building, at 9501 Black Bear Trail. The new building has allowed for all of the large kennels be under the roof, resulting in no more animals being housed under awnings or tarps and patio heaters no longer being required.

Maddies Fund has partnered with FSAH for an operational consult and mentorship and Ballman said FSAH is “utilizing this dramatically.”

FSAH is currently hiring a Foster Coordinator and a Transport Coordinator.

2023 saw a record number of adoptions with 957 animals being adopted, more dogs than cats.

The shelter’s goals for 2024 include establishing and utilizing SMART (Specific. Measurable. Achievable, Relevant. Time-based) Goals, creating and instituting Pro Forma style internal financial reporting standardized format to manage finances, establishing 1, 3, and 5 year plans, increasing the volunteer and foster base by 10%, increasing adoptions by 10%, increasing the live release rate from 93% to 95%, decreasing average days on-site by 25% (The current average length of stay is 127 days for dogs and 24 days for cats. Ballman mentioned that the longest term residents of the shelter are two dogs with 544 days and 526 days each and that if he were to remove the top 5 longest residents from the average that the length of stay for dogs would drop from 127 to 103. ), increasing fundraising 250% (Donations are down more than 45% since the start of 2022.), and introducing a Capital Donation Drive.

Ballman said that he is “ripping the rear-view mirror off. We’re going forward.” He unveiled the shelter’s new slogan “Empowering compassion, one paw at a time.”

Director George Catsavis inquired about when the third-party review of the disputed audit findings would be completed. Ballman said that it possibly may be available at the end of this week. He said “We all wanna get this behind us.”

Director Martin said that he wants Animal Control to have a place to take dogs every time they pick one up, to “see urgency” in getting animals adopted or transported, and to “see the shelter empty on a regular basis.”

Director Good said that the problems with stray animals start with irresponsible pet ownership and that responsible pet ownership has to be the focus of the solution, that the shelter cannot fix all of the problems. He praised Ballman’s prioritization of “moving forward”.

Director Morton and Director Rego both praised the record number of adoptions and transports.