Highlights of the Fort Smith Board of Directors Meeting 9/13/22

The Fort Smith Board of Directors held a study session meeting 9-13-22 with Director Catsavis absent, Director Good attending remotely until joining in person about the last half hour of the meeting, and Director Rego having to leave about half way through the meeting.

The meeting begin with a presentation by Utilities Director McAvoy concerning the Arkansas Act 605. One of the major parts of Act 605 to impact Fort Smith is that if a utilities capital improvement project costs more than 20% of the previous year’s utility department revenue a water rate study will be required (that could result in mandatory rate increases). Also, (regardless of any other triggering projects or conditions)a rate study will be required to be conducted by July 2026 and then every 5 years after that . Any required rate increase following a rate study would be required to be implemented in one year unless the rate increase is over 50% then it could be implemented over 2 years.

Director Morton mentioned that the consent decree is likely to cause issues for Fort Smith due to how the Act is written and the way its financial tests are calculated. He also expressed concerns about the public negative perception of the Board’s credibility after promising a sewer rate freeze while promoting the sales tax for consent decree sewer work if Act 605 forced dramatic water rate increases. Even though the water increases are not sewer increases, they come as separate lines on the same bill. Director Dawson also said that she is “extremely concerned” about mandatory increases caused by the legislature that the Board and City Administration did not call for that would have significant effects on the household budgets of citizens. Director Settle called Act 605 a “bad bill”. Participating via phone, Ryan Benefield from the Arkansas Natural Resources Commission said that he “can’t imagine your rate increase is what you think it will be”. Director Morton suggested that perhaps the State legislature could add an exemption for Fort Smith for as long as the consent decree is in effect.

Administrator Geffken suggested and the Board agreed that the Board should vote on an official resolution calling for the legislature to make suggested changes to Act 605 that could be submitted to legislators before their session convenes.

Utilities Director McAvoy spoke requesting the Board consider eliminating the utility payment drop boxes located at the Dallas, Windsor, and Miller branch public libraries and on Jenny Lind (leaving the drop boxes at A Street, 623 Garrison, and the Drive-through facility all open). The main reasons cited for eliminating the drop boxes were issues with the cost, payment accuracy, employee security and vandalism. Of the 4 locations studied for possible elimination, there was a total annual average of 6,624 payments collected at those boxes. The annual cost of collecting from the boxes including labor and transportation costs totaled $27,375. That results in a cost of $4.13 per bill to collect those drop box payments. McAvoy stated that he doesn’t feel the boxes provide a good enough benefit for the investment.

Director Martin pointed out that recently the FEMA funds that were anticipated to cover the costs of the drive-through facility were denied so the costs associated with the drive-through would now be entirely the City’s responsibility. He questioned whether it might be a “better deal to get rid of the the drive-through and keep these open”. Director Geffken added that the drive-through employees were reallocated from the Collections Department so no new hires had been added to man the facility and that the City is looking to appeal the FEMA decision on the funds for the drive-through. McAvoy mentioned the possibility of opening 2 more of the windows at the 623 Garrison office if the drive-through were to be closed down.

Director Settle suggested that the payment drop boxes could be moved inside the libraries and collected every other day instead of daily. He said it is “hard to think spending 4 dollars per bill is sound judgement”. Director Morton expressed concern about the vandalism. He also suggested picking up the payments weekly, on Fridays and giving a week’s leeway before late fees would be applied. Of the boxes he said “Get rid of them” and “I don’t like it. It’s unfortunate. But that’s the world we live in.”

The Board heard a presentation from James Gilliam regarding the allocation plan required by the federal government for the $1,501,450 in federal funds that Fort Smith is to receive through the American Rescue Plan HOME investment partnership program to be used for programs that reduce or prevent homelessness including tenant based rental assistance, development of affordable housing, supportive services, and acquisition or development of non-congregate shelter units. The proposed allocation plan calls for $255,246 to go to supportive services, $1,020,987 to go to affordable rental housing, and $225,217 to go to administration and planning. If the allocation plan is approved it can be submitted to the federal government and then specific proposals can be taken for projects and approved by the Board to receive their share of the funds.

Human Resources Director Rick Lolley spoke on the proposed plan to waive health, dental, and vision insurance premiums for the City employees during the month of December. This proposal is in response to the $6.3 million in the Health and Wellness account exceeding the $4.3-$4.5 million predicted to be needed for insurance costs. Waiving the premium payments for the month of December would cause a total of $238,000 to not be paid in. The savings would serve as a “Christmas Bonus” to the employees who have done a good job of not spending the money in the account.

Director Settle asked if the money might be better spent by using it to reduce potential insurance premium increases next year. Lolley responded that it is expected that the rates will stay the same next year.

Finance Director Andy Richards spoke on awarding one time bonuses to city employees in recognition for their hard work during the Covid 19 pandemic. The proposed bonuses would be $2500 to full-time Police and Fire employees, $1500 to other regular full-time non-uniformed employees, and $750 to part-time employees. The total cost would be $1.63 million, but Richards explained how though it is not technically being paid for directly with American Rescue Plan funds, it is effectively being reimbursed that way via budget shuffling. So it would not cost the City any additional budget money.

At the beginning of the meeting in anticipation of his having to leave early, Director Rego expressed his support saying he was “very much in favor” of both the waiving of the December insurance payments and the one time employee bonuses.