Highlights of the Fort Smith Board of Directors Meeting 9/24/24

At the Fort Smith Board of Directors study session meeting held 9-24-24 with Director Christina Catsavis absent, the Board discussed possible uses for the former Bost building 1801 South 74th that has returned to City ownership when Bost moved their operations to a different facility. The deed turning back over to the City was discussed at the 3-36-24 meeting.

One potential use discussed is that (though no formal proposal has been submitted) the City has been approached by Methodist Village that operates a senior living facility nearby about using the building for a child daycare center to be operated by Methodist Village that would provide care for 150 children (1/3 of the available slots reserved for children of employees of Methodist Village, 1/3 reserved for select Methodist Village supporters, and 1/3 to be made available to the public at large).

Another potential use discussed is that it could be used as an animal shelter. The building would require significant renovation to be well-suited for that use.

Another potential use discussed is that the City has been approached by Blue Sprig Pediatrics about using the building for a facility for therapy for autistic children. The services provided by Blue Sprig would be similar to some of the services previously provided in the building by Bost.

Melissa Curry spoke representing Methodist Village and mentioned that child care helps in recruiting people to move to a community. She said that Methodist Village would be willing to spend $1 million dollars to upgrade the building and make it suitable for their purposes and that they would be asking the City to pay for the remaining $458,000 needed for the renovation. She said that Methodist Village would view the daycare as “a mission not a revenue source.”

Director Good pointed out that Methodist Village was not presented with the opportunity to purchase the building outright and asked that they be presented with the opportunity to consider that option. Director Settle asked Curry if Methodist Village would be interested in buying the building. Curry said that it would depend on the price. Director Settle asked Administrator Geffken the appraised value of the building. Geffken said that an official appraisal has not been conducted but an unofficial estimate would be $1.5 million-$2 million.

Director Morton mentioned that there is a shortage of daycare available in our area. He asked Curry how the prices for the proposed daycare would compare with other area daycares. Curry said that they researched the prices of existing daycares in Sebastian County and used the median of those prices to set their price. She said it “could not be a free service.”

Director George Catsavis asked how soon the daycare would be open. Curry answered that they would anticipate opening in August 2025.

Director Morton expressed concerns about the legal issues involved concerning investing in a City owned building with 2/3 of the daycare slots dedicated to specific organizations. He said that rental of the building to them potentially might be a “different equation.”

Director Good said that he is not in favor of using the building as an animal shelter He expressed concerns about noise and smells impacting the “upscale” residential neighborhood across the street and Methodist Village Senior Living. He said that the site is not a “proper location” for an animal shelter. He also expressed concerns about the cost of renovation needed to make the building appropriate for a shelter. He said that a shelter needs to be a dedicated purpose-built building not “makeshift.” He mentioned that Fort Smith Animal Haven has found a temporary building to use until the funds are raised for and construction is done on their planned new permanent purpose-built building. Good said that it is “very difficult to fundraise” when some Board members express lack of faith in the Fort Smith Animal Haven organization.

Director Rego asked how much money Blue Sprig would be asking for for the renovations that they would want to make the building suitable for their purposes and how much it would cost to renovate the building into an animal shelter. Geffken said that Blue Sprig needs more time to work on their proposal and that there have been no estimates made yet on renovations for an animal shelter.

Director Morton mentioned that floor drains would need installed in the concrete floor and some cement walls would need removed to make it an animal shelter He said that it would be a “tall task” and “I don’t see that as realistic.” He expressed that he does not support using the building for a shelter. He suggested that Blue Sprig be given more time (with a fixed deadline) and said that it might be an “economic transaction that would benefit” residents of the city. He expressed his view that the city does need daycare but that he prefers hearing from Blue Sprig first with the daycare being a second choice use for the building.

Director Settle expressed interest in keeping the building a school like Bost was and requested that Geffken reach out to local public schools, UAFS, and local charter schools regarding their interest in the building. Director Settle said “I would go down that path.” He also suggested that the building could be turned into a community center with indoor pickleball courts. He said that if the building is to be used for a private business like the daycare that the building should be sold to them, not rented.

Director Martin said “It is important for us to sell the building.” He expressed concerns about the sounds negatively impacting the neighborhood if it were to be used as an animal shelter. However, of investing a million dollars in renovations to turn it into a shelter versus the $5 million-$8 million for the proposed new Fort Smith Animal Haven shelter, he said that it would be a “much more cost efficient option if we wanted to go that route.” He said the Board “need to consider it and talk it through.” He expressed his desire to see Blue Sprig’s proposal. He called the property a “prime location” and said “the land is valuable.” He suggested that the City hold out to see who would be interested in buying it to be a “prime amenity” for that area.

Director Good expressed a desire to give Blue Sprig more time. He said “We do have options” and suggested taking time to get an official appraisal for a sale price. He expressed concerns about the cost that would need to come from the general fund or the Parks Department budget to turn the building into a community center with pickleball. He voiced opposition to using it as an animal shelter saying that investing a million in a temporary animal shelter “makes no sense to throw that money down the tube.”

Director Rego suggested expediting the appraisal and moving forward on a plan to sell or repurpose the building so that the building does not sit vacant for a long time. He called a daycare a “difference maker for a lot of people in the community.”

The Board discussed the goals of the Utility Advisory Committee that has been proposed to be created. Creation of the committee was discussed at the 7-30-24 meeting.

Director Morton said that the consent decree is the “single most important item facing the City of Fort Smith.” He suggested that the committee should prioritize the consent decree, water leaks, meters that are reading zero, and missing water. He suggested that the committee be “focused on these issues” and have a makeup similar to the Audit Advisory Committee, 3 Directors and 4 citizen members and hold monthly meetings to “dive into these issues” in a way that the Directors “don’t have time in regular meetings.” He said that the committee could design and periodically update an area on the City website to provide info for the Board and the public to easily see where the city stands on the consent decree including what has been done, what is being done, and what is still to go. He proposed that the committee meetings could be held much like the Audit Commission meetings with a less formal format than Board of Directors meetings, without the City Clerk and City Administrator and without adherence to Roberts Rules of Order. He suggested that the City hire the best company in the US for sewer work to look into a more efficient plan to save time and/or money on consent decree work. He said that that would cost money but would be “worth trying.” He said “I see no downside” to a committee.

Director Rego called Director Morton’s suggestions a “very good concept and good structure.” He expressed his willingness to serve on the committee.

Director Good said that he is “all for saving money and saving time.” He suggested that instead of a committee the issues could be delved into at extra Board meetings and that that would be “more transparent.” He also said “I’m getting plenty of information” already. He praised Utilities Director McAvoy saying that if he can’t answer a question he will get the answers and “We definitely have the right man in place.”

Director Martin expressed frustration that not enough information on the consent decree is provided to the Board and the citizens including the progress, the money spent, and the money left to be spent. He expressed his desire to have that information in an “easily digestible” format. He said “I don’t know if a committee is gonna have any more.” He said that he is “not advocating for” a committee yet. He suggested that if a committee is formed that it might need experts on it with “educated backgrounds” in specific fields relevant to consent decree and water work like engineers.

Director Rego agreed with Director Good’s praise of McAvoy. He expressed support for either a committee or for having extra Board of Directors meetings on the topic of utilities.

Director Good said that maybe the Board “just hasn’t asked the right questions” to get the answers they are looking for.

Director Rego said that the Board members are not a “monopoly on good ideas” and expressed support for the potential of less formality in the committee format than the Board of Directors meeting format. He said that there is “value to having some sort of mechanism” “to receive thoughts and suggestions” from people with expertise on how to reduce costs.

The creation of a Utility Advisory Committee composed of 3 Board members and 4 citizens will be on the agenda for a vote at the next meeting.

The Board discussed that the Central Business Improvement District (CBID) has proposed purchasing the building at 623 Garrison that the City currently leases for the City offices and leasing it to the City at terms favorable to the City and the City being able to purchase it outright for a nominal amount as soon as the CBID’s loan taken out for the purchase of the building is paid off. The Blue Lion building where Board of Directors meetings are held is handled under a similar type of arrangement. The City would be able to also start using the spaces that it does not have use of under the current lease including space on the 1st, 2nd, and 6th floors and the basement. The full renovation that the City would ultimately like to have done to the office building starting with renovating the 1st floor into a customer service floor would cost $14.6 million and the CBID would not be involved in that. The CBID’s intentions in purchasing the building and leasing it to the City are to help ensure that the City offices stay downtown instead of relocating to another neighborhood. The current lease was discussed at the 3/5/24 meeting.

Director Morton expressed concerns about the legality of the arrangement under State law that only allows for 5 years to be the longest a City can commit to a lease without a designated revenue source to cover it. He said of 20 year financing with a 5 year lease in an ordinary commercial transaction “Banks would never enter into that.” He said that typically the lease term would be equal to the term of the debt. He said that that law is why the current lease on the offices is always 5 years and no longer. Director Morton advocated for the City purchasing the building themselves (instead of the CBID purchasing it) and paying it off over 5 years.

Director Martin asked CBID Chair Bill Hannah what the total current purchase price for the building would be. Hannah answered $4 million. Director Martin pointed out that purchasing the building outright was not an option offered to the City when the lease was last up for renewal. Hannah said that the CBID is asking for the opportunity to negotiate and would be fine with the City buying the building themselves because the CBID just wants to keep the City offices downtown.

Director Martin mentioned that the rent paid already on the building could have bought the building “two times over.” Director Morton said that while renting the City has not had to pay for maintenance, insurance, or taxes on the building. Director Martin said “I wish we could have done this deal years ago.” Director Morton said that in prior years the City didn’t have the fund balance and there “was no money in past years to do this.”

Director Rego expressed his support for staying downtown.

Director Settle said that he needs to understand better the $4 million purchase price and $14 million renovation cost for the current building compared with another building that is up for consideration at 3600 Wheeler (the former Southwest Times Record building) for a $6 million purchase price and would also need renovations. He said “It’s a dollars and cents” issue and said “We need to get a modern City Hall” to provide better customer service. He expressed that he did not care if that City Hall is downtown or not.

Director Morton said that the building on Wheeler is not practical and is “not laid out well for a city operation” and would require significant money to turn into a City Hall. He called it “too elaborate” and said it has a lot of wasted space

Director Rego said that while still having over 4 years on the current lease for the current building he does not want to have a situation where a decision has to be made “in haste” by waiting too long to address the issue. He suggested that prior to the end of the year that the Board have a study session about the future location of the city offices.

Director Good said that when he toured the Wheeler building he loved the building and that more departments would be able to fit inside it than can reside in the current building. He expressed concerns about the Wheeler building being surrounded by an industrial area. He said that he has changed his mind about supporting moving to the Wheeler building after considering the economic impact that moving the City offices out of downtown would have on downtown.

The Board will vote on whether the City would or would not move City offices out of downtown at the next meeting.