Highlights of the Fort Smith Board of Directors Meeting 2/21/22

The sole issue up for discussion at the 2-21-22 special study session meeting of the Fort Smith Board of Directors was the renewals of the existing .25% sales tax to be divided evenly between the Parks and Fire Departments and the renewal of the existing .75% sales tax to be divided with 16.7 percent to the Police Department and 83.3 percent going towards sewer repairs required by the Consent Decree. The issues had original been slated to be voted on by the public in an election to be held in February, but the Board instead postponed the election and held a series of public meetings to share information about the proposed tax extensions and get feedback from the citizens. They held this special study session to discuss what they wanted to put on the May 24 ballot before the meeting tomorrow in which the Board would vote on putting the tax renewal measures on the ballot.

The biggest focus of the discussion was on the .75% tax to go to the Police and Consent Decree sewer repairs. The Board seemed to feel that the previous version of the .25% 10 year extension for Parks and Fire was still what they were fairly comfortable with sending to a vote. The bulk of the discussion on the .75% tax was the length of the term. There was discussion generated by the feedback received from the citizens and at the neighborhood meetings concerning the length of the extension. Director Settle stated “Nobody’s even argued about what we’re using it for, it’s all about the time”.

Director Rego expressed that it was a matter of trust in the department heads asking “Do we trust them with 10 years of funding?” and expressing his opinion that they have not done anything to prove themselves less than responsible stewards of the money. Director Martin responded that it is about “citizens’ trust of us” not the Board’s trust of the department heads. Director Good added his opinion that it’s not really about the people’s distrust in the Board but rather their distrust in government. He expressed his feeling that “5 years, 10 years, 1 year” wouldn’t make a difference on that distrust and that the City has “done everything within our power” and “ We have earned nothing but respect of the people. All we can do is keep trying”. Director Dawson added that “As long as I can remember…People don’t trust government. Just don’t. And I’m with them past us in the national government realm.” She said that with a 5 year term the people that don’t trust the Board still aren’t going to trust it. She expressed the impression she’d gotten from feedback she’d heard was that people are “not against the sales tax” but it is “all about fear about how we’re going to handle the money”. Director Morton mentioned some of the lack of trust from citizens originating in the way the Consent Decree was originally negotiated in 2014 and the water billing problems in 2019. He said the water billing issues “really burned some people. People don’t forget that.” . He expressed that the city needs to do a better job at communicating where we are and what’s happening and what’s in the plans for the consent decree like talking about it publicly every month . He said that there are “reasonable people out there that have concerns because they don’t get information they need”. Director Rego agreed on the need to improve trust and communicate better and differently and through multiple platforms. He expressed that just modulation of length of time of renewals or amounts does not matter where those trust issues are concerned.

Director Settle suggested that a committee be formed comprised of 7 citizens and the Deputy City Administrator and Finance Director to study the money coming in from the sales taxes and how it is being spent and generate regular reports on the subject. Directors Rego and Good expressed agreement with the idea. Good added that while creation of a committee is a new aspect of the discussion on these specific tax renewals, “Transparency isn’t new.” and pointed to other committees that the Board has formed and utilized the input from in the past like the Street Tax and Animal Advisory committees.

Director Morton talked about that there will be no money left for consent decree work in 2023 if the tax is not passed and that the money “has to come from somewhere”. He mentioned that if the tax passes and the city can pay as they go for repairs rather than by bonds they will save “basically 100%”. He pointed out and Director Geffken agreed the city cannot actually currently legal obtain any more bonds anyway. He mentioned that the kind of sewer rate increases that would be required to cover the consent decree without the tax would take “58% on top of what we already pay right now”. Director Settle added that if the tax does not pass the Board would be forced to pass a high sewer rate increase. The public could override that ordinance by vote, but then the Federal government would step in when the consent decree work wasn’t done and would force rate increases of another 60-80% to pay for the work plus fines for when the city was in violation of the decree.

Director Settle suggested that wording be added to the ballot measure or an ordinance be passed by the Board that would in addition to a 3 year freeze on rate increases, after that 3 years, would limit the sewer rate increases to no more than an additional 3.5% or else the tax would be ended. This would be intended to serve as a deterrent to any future Boards against high sewer rate increases. Directors Rego and Good expressed agreement with the idea. Director Martin questioned whether that was something that could be done. Administrator Geffken agreed to check into the legalities of what would be the best way to handle adding that cap.

The Board discussed different options in term lengths. In the end, the consensus, with all in agreement but Catsavis, was that 10 years was the best option. Catsavis favored an 8 year term saying that the majority of the voters who preferred a 5 year term might still vote for 8 but would not vote for 10. Martin originally expressed a preference for 6 or 8 years, but eventually seemed to join the majority in their support for 10. Rego expressed that one of his reasons for preferring the 10 year term is that he did not want the Police department to get a shorter term than the Fire department. Good said in his expression of support for 10 years “ Numbers don’t lie. We’re not gonna get there in 5. Not gonna get there in 8” and “ We can earn trust while we’re still doing our jobs”. Settle expressed his support for the 10 year term so long as the rate freeze and 3.5% cap after that were included, without those limitations he’d only be in favor of 8 years. Morton added in his expression of support for the 10 year term that the additional rate cap paired with the 10 year term would lock in sewer rates for longer over the 8 year option.

Director Morton inquired whether the sales tax for the Consent Decree could be written so that it was set to automatically stop if the Consent Decree repair work were completed entirely before the term ran out? Geffken answered that it could not for legal reasons, however the Board could refer the issue to the citizens to vote to repeal the tax if that situation were to arise.

Director Dawson mentioned that she wanted the City to take out advertisements both in digital and traditional media sharing information on what will happen if the tax renewals do not pass.

At the meeting scheduled for 2-22-22, the Board will vote on whether to refer to the voters on the 5-24-22 election a .25% sales tax renewal for Parks and Fire for 10 years and a .75% sales tax renewal for 10 years with 16.7% going to Police and 83.3% going to consent decree sewer work and including a 3 year rate freeze on sewer rates and a cap of 3.5% increase on sewer rates during the remaining 7 years of the tax term. The creation of the citizens committee on the sales taxes will be added to the 3-1-22 meeting agenda.