Highlights of the Fort Smith Board of Directors Meeting 5/6/25

At the Fort Smith Board of Directors meeting held 5-6-25, the Board voted unanimously to approve the Community Development Advisory Commission’s recommendations for the allocations for the federal Community Development Block Grants and HOME investment partnership grants. This issue was discussed at the 4-22-25 study session meeting.

The Board voted unanimously in favor of a zoning change for 721 North Greenwood Avenue that will allow for the existing vacant building to be used as a single family residence and would also allow for future development for light commercial uses.

The Board voted unanimously in favor of an amendment to the Unified Development Ordinance that will allow for duplexes to have access on present and future classified streets including boulevards, arterial streets, collector streets, and freeways. The change was proposed because variances for that are requested frequently (5 have been granted recently for subdivisions) and the change will eliminate the need to go through the Planning Commission process for duplex street access.

Director Martin asked if there might be potential problems or negative impacts. Planning Director Rice said that there would not be because it would be for where zoning already allows for duplexes and that the amendment was discussed with the Engineering Department and “they were in concurrence.”

The Board voted on amending the 2025 Operating Budget after a series of meetings reviewing the budget and hearing cuts proposed from all of the departments. The cuts were discussed at the 4-15-25 meeting, 4-22-25 meeting, and the 4-29-25 meeting. The amended budget on the agenda for 5-6-25 incorporated all of the cuts suggested by the departments except for delaying hiring of a “critical” employee in the IT department and no cuts at all to be made to the Police or Fire Department budgets. The amended budget also accounted for the reduction of expenditures for credit card fees because when the original budget was made the City was still planning on paying for those fees, but instead now those fees are paid by the customers who use credit cards.

The amended budget presented on the 5-6-25 agenda was $4,238,060 smaller than the originally approved budget. The savings would be allotted with $1,300,908 to the General Fund, $1,207,335 to the Streets Maintenance Fund, $921,474 to the Water and Sewer Fund, and $808,343 to the Solid Waste Fund. The General Fund end-of-the-year balance with the amended budget would be projected to end up with a 17.7% contingency reserve balance, still short of the 20% contingency balance threshold required by City policy at which measures must be taken including a 10% administrative hold on spending, capital projects must halt, followed by budget cuts, and even lay offs if required to get back up to the 20% threshold.

Chris Cadelli spoke and asked if the $4.2 million in budget cuts matching up with the $4.2 million spent on water slides for Parrot Island was just coincidence or if the cuts were designed to offset that purchase. Director Martin responded that the cuts proposed by the Departments were actually $5 million but that the Board chose not to cut Police and Fire budgets. He said that the amount of the cuts “didn’t have anything to do with” the slide cost and that the similar number was just a coincidence. Cadelli called the cuts “a decent start” and expressed his opinion that there is “a lot of work left to be done on the spending side.”

Director Kemp asked what would happen with the general fund still being anticipated to fall below the 20% contingency reserve threshold. Chief Financial Officer Richards said that an administrative hold would be his recommendation. He said that an administrative hold was enacted during Covid and again at the end of 2024 “when things were getting tight” and that the City has “had success with administrative hold in the past.” Director Kemp expressed his desire to find a “policy oriented way” to spend less than we bring in saying “there has to be more wiggle room” if an administrative hold is possible. Richards mentioned that some savings are likely to be realized through vacancies where positions that were budgeted for for the entire year aren’t full the full 12 months.

Director Kemp spoke in opposition to cutting the Planning Department staff position and to cuts to Transit that would mostly involve leaving federal dollars behind. He advocated for spending for 2 mowing trucks for the Parks Department saying “I would like to see mowing done better in Fort Smith.” He suggested potentially purchasing used trucks instead of new ones to save money and still be an improvement over the current vehicles that are in very bad condition.

Director Martin suggested that if the Planning Department has problems as a result of the staffing cut that they could come back to the Board and request funding to hire for the position. He said the Board is “trying to be as stickler as we can around this budget.”

Director Good said “We don’t need to wait till we have problems to address these problems.” He expressed his support for not cutting for the Planning position and parks equipment needs.

Director Martin voiced his disagreement with the new allocations discussed at the 1-28-25 meeting being included in the amended budget. Director Settle said of the new allocations being included “I’m on the fence on this one.” but added that the Board “can vote on budgets as much as we want as long as approved” and called the proposed amended budget “a good start.” Director Rego said that the new allocations seemed “piggy backed” into the amended budget and that they “should not be concurrently.” He said of the new allocations “The conversation should probably continue on that.” and called it “still somewhat of an unsettled issue amongst us.” Director Martin motioned to amend the proposed amended budget to have it include the same allocations as 2024 (not the new allocations). Director Rego voiced his support for moving forward with the 2024 allocations. Director Kemp agreed with Director Rego that the new allocations should be a separate conversation from the budget cuts. The Board voted unanimously to amend the amended budget so that it would have the same allocations as 2024 (not the new allocations).

Director Kemp asked Transit Director Savage how many federal dollars the Board would be “saying no to” by making the proposed Transit cuts. Savage answered that $337,500 of the proposed total $446,000 in Transit cuts would be from federal dollars. He mentioned that most of the items being cut would be federally reimbursed 80% and others at 50%. He said that the Transit is on average 75% federally funded. Director Kemp expressed his opposition to making cuts to items that are mostly federally funded rather than funded out of the General Fund saying “That does not make sense.” Director Rego motioned to amend the proposed amended budget to not include the Transit Department cuts. The amendment to not cut Transit passed with all of the Directors except Director Martin voting in favor of the amendment.

Director Kemp motioned to amend the amended budget to not cut the Planning personnel position and to authorize $80,000 in spending for Parks “to address demand for equipment.” Parks Director Deuster said that replacements for the 2023 dump truck and service truck that have been on the new needs budget requests the past 2 years but not approved would cost $140,000 (based on the 2024 price) and that the lighting originally budgeted would be $6000 and the security cameras for Creekmore would be $20,000. Director Settle said that the additional Parks equipment spending for the trucks should be brought to a future meeting because the issue at the 5-6-25 meeting is about budget cuts, not new needs. Director Rego agreed with Director Settle saying that Director Kemp’s motion combined things that are “different structurally”. He suggested that the trucks purchase be discussed in the future but that the Planning position that is a proposed cut would be aligned with the other amendment actions made at the 5-6-25 meeting. Director Kemp withdrew his original motion and instead motioned to amend the amended budget to not include the cut to the Planning staff position. The amendment to not cut the Planning position did not pass with Director George Catsavis, Director Settle, and Director Martin voting against amending and Director Christina Catsavis away from her seat and not participating in the vote. After Director Christina Catsavis returned, Director Rego motioned for a revote since she was present to participate again. The Board voted against a revote with only Directors Rego, Good, and Kemp voting in favor of revoting. So the original decision to keep the Planning position cut included in the amended budget stood.

The Board voted in favor of the amended budget (with the cuts to Transit removed and the 2024 allocations in place instead of the new ones) with only Director George Catsavis voting against it.

The Board voted unanimously in favor of a resolution calling for renewal of the City sales taxes for 1/8 cent for Parks capital improvement projects, 1/8 cent for the Fire Department, 1/8 cent for the Police Department, and 5/8 cent for Streets, Brides and Drainage to be put up for a vote on the 2030 Primary election ballot. The proposal was suggested so that if the May 13 votes regarding issuance of bonds for consent decree projects and the reallocation of 3/8 cent of the Streets tax to the consent decree instead through 2059 (so that paired with the existing 5/8 cent tax for the consent decree there will be a full 1% sales tax going towards the consent decree without any increase in the total tax rate) passes that all of the City sales taxes that are not connected to bond debt service would be up for renewal all at the same time.

Krystal Cadelli spoke and expressed her support for the Fire and Police renewals separately from the consent decree renewals that would not be up for a vote again for 34 years. She voiced her prediction that the May 13 votes are probably going to fail. She expressed concerns about the Board’s spending saying the Board doesn’t “know how to make cuts.”

Director Martin said “The Board listens.” and called not including plans for the renewals when the May 13 vote was originally proposed an “oversight when we first put this forward”. He said he is “happy to move forward on this.”

Sales Tax Review Committee Chair Walter Echols spoke and said that the reports of the revenues and expenditures for City sales taxes and the City’s portion of the County sales tax are “vigorously reviewed” by the committee and that from January 1, 2022-December 31, 2024 all of the expenditures were found to be used for the purposes approved by the voters (or in accordance with the resolution adopted by the Board for the City’s portion of the County sales tax).

Director Settle said that the votes would let the public decide. About the May 13 votes, he mentioned that the public trusted the City with a 34 year bond investment to expand Lake Fort Smith and that it has worked out well. He said that it would be the same with the consent decree and compared the 30 year bonds to financing a house with a 30 year mortgage. He mentioned that there would be no tax increase if the May 13 votes passed and that the public can buy bonds and could be bond holders for the consent decree. He mentioned that bonds are a tax-free investment for the bond buyers.

The Board voted unanimously to contract with Crawford Construction for improvements to Garrison Park next to the parking garage. The total cost of the project will be $85,603.97, but the CBID will be covering $77,083 of the cost, leaving the City’s responsibility only $8,520.97. The City’s contribution will be paid out of the Parking Garage Fund budget.

The Board voted to discontinue the Street department mosquito spraying program entirely. The program costs $73,000 per year and concerns have been expressed about the health risks from the chemicals used in the spray. This issue was discussed at the 4-22-25 meeting.

Director Rego asked how long the City has been doing the spraying. Streets Director Meeker answered since at least 1968. Director Rego expressed his opposition to “unilaterally stopping taking action against adult mosquitos.” He voiced his frustration that the concerns about the chemicals “contrasts” with the information about the program on the City’s website that does not express those concerns. He asked if a City employee has ever filed a medical claim or been caused to be ill by the mosquito program. Meeker said that no one has but that he has read research that links mineral oil to certain skin cancers.

Director Christina Catsavis mentioned that her own neighborhood is wooded and often has standing water that contributes to mosquitos. She asked about going to an opt-in rather than an opt-out model for the spraying. Meeker said that the chemicals they use don’t go bad so they could continue to use what they already have but that spraying a house here and there, especially with utilizing the seasonal staff rather than the experienced full-time employees, could be a challenge.

Director Martin mentioned having heard feedback from residents that don’t want the spraying. He also reminded that the Streets Department gives out free mosquito larvicide pellets to combat mosquitos in standing water. He said “I question the effectiveness” of spraying and voiced his concerns about the safety of the chemicals.

Director Rego mentioned that mineral oil is used frequently in bath, body, and cosmetics products. He expressed support for an opt-in program for spraying and asked how the current opt-out program works. Meeker said that it works by address and they just stop spraying at the houses that have opted out but that it is a “constant problem.” Director Good mentioned water leaks causing pooled water that makes a home for mosquitos. He also expressed his view that opting in or out doesn’t address some of the problems.

Director Kemp asked if the Streets department could hold onto the special trucks used for the spraying for a while just in case discontinuing the program turns out to be a bad decision. Meeker said that they could if the Board desires them to. Director Kemp said he “would like to see a season without this.”

Director Martin expressed an interest in seeing data on mosquito-transmitted diseases if the City were to go a season or two without spraying. Meeker said that there were 2 cases of West Nile Virus in Arkansas last year but that they were not in this area.

The Board voted to discontinue mosquito spraying with only Directors Rego and Good voting against discontinuing the program. Director Christina Catsavis abstained from the vote saying that she did not have enough information to make an educated decision.

The Board voted unanimously without discussion to apply for the $6 million needed to renovate and equip the building at 4501 Burrough Road to be the new consolidated 911 dispatch center from Senator Boozman’s Congressionally Directed Spending funds. The funds require a 25% local match, but the Sebastian County E911 fund will cover that contribution resulting in the City not being responsible for any of the cost.

The Board voted unanimously without discussion to issue non-residential solid waste permits to EZ-Gone Junk Removal and Driveway Dumpster Services and renew Waste Management of Arkansas’s permit. The permits are for 2 years and include a 5% franchise fee.

The Board voted unanimously without discussion to purchase a replacement TarpArmor TDS30XS 30ft tarp deployment system for the landfill for $94,155.77. The tarp machine saves money and extends the life of the landfill by allowing the required coverage of the garbage to be done with tarps instead of soil.

During the Officials Forum section of the meeting, Director Settle mentioned that Parrot Island will be open for Mothers Day for the first time.

Director Christina Catsavis asked if anything is being done about the bad smell at the Blue Lion building and mentioned that she wasn’t coughing before the meeting but was coughing during the meeting so she is concerned about mold. Acting City Administrator Dingman said that they are currently trying to figure it out and the sewer, drainage, and basement humidity are being investigated.

Mayor McGill mentioned that there is a public hearing scheduled for May 15 at the Alma Community Center regarding the renewal for the permits for Denali in Crawford County that operates the agricultural waste residuals operation that has been the cause of extremely bad smells citywide in Fort Smith.

Director George Catsavis spoke about the upcoming May 13 votes calling the sales tax the “lesser of 2 evils.” He acknowledged public concern about the 34 year term and asked if the EPA gives the City more time for the consent decree if the City would be committed to issuing the bonds. Chief Finance Officer Richards answered that the bonds will be issued in increments, like starting with an issuance of $100 million. Then if something changes like there is more time or a different funding source, the bonds are built with call dates , usually about 10 years in for the first call date, and the bonds could be called in at that time. Then the tax could be referred back to voters. Director Catsavis mentioned that it looked like the City would lose $29 million in streets funding if the streets renewal does not pass. Richards confirmed that. Dingman said that then the Board would then have to devise “Plan B.” Director George Catsavis said that if it were a new tax he “would say Hell No” but the taxes on the May 13 ballot are not new. Director Christina Catsavis said that the Board can acknowledge that the consent decree is “oppressive” and also acknowledge that they have to move forward with consent decree work to avoid fines. Mayor McGill said that at the recent event in Fayetteville Representative Womack was there and mentioned he has invited the EPA Administrator to Arkansas. McGill asked Womack to bring the EPA Administrator to Fort Smith when he visits the state. At the invitation of Director George Catsavis, former Director Lavon Morton spoke regarding the May 13 votes. He said that issuing bonds in stages saves interest and also allows for if federal or state money becomes available or more time is given that they could instead fund the work pay-as-you-go. He called passing the May 13 measures the “best of a long list of really bad options.” Director Martin called the May 13 measures “the better of a bunch of bad options” and mentioned that they are an alternative to ending up with huge sewer rate increases. Mayor McGill said that in the most recent discussion with EPA officials he “got a sense we could warp this consent decree up if we pass this initiative.” DIrector Christina Catsavis and Director Martin disagreed and said that in the discussions they were on the call for they got the impression that the EPA wants the City to do even more. Director Rego said that when he was on the most recent call that the EPA “want to see successful passage of the vote next week” and that they are “encouraged by the 2024 work” and plans for the work if the May 13 measures pass. Utilities Director McAvoy said that the discussions Director Christina Catsavis and Director Martin were on the calls for were “contentious” but that his impression of the most recent one is that it was “hopeful.” City Attorney Canfield mentioned that there is only a year and a half left to complete the consent decree, but that for the first time in the last 3-4 years of negotiations the EPA seemed on-board with a 10 year extension. Director George Catsavis asked if the May 13 measures would provide enough funding so that the work could be completed in 12 years. McAvoy said “a large portion would be funded through that.” There is still $650-680 million total in work to be done. He called it “attainable” in that time period. Morton added that the second part of the finance plan if the May 13 measures pass is to refinance the 2018 bonds in 2030. He said that would not add to sales taxes or to utility rates and would make up the second $300 million needed to fulfill the consent decree requirements. Dingman reminded about the details about the early voting that has begun and for election day May 13.