Highlights of the Fort Smith Board of Directors Meeting 7/29/25

At the Fort Smith Board of Directors meeting held 7-29-25, the Board heard an update on the mid-year financial report and discussed the budget.

Chief Financial Officer Richards said “overall the numbers look fairly positive to me” and that they “reflect the cuts” and the “departments are being conservative.” The general fund currently is at a 31% contingency reserve percentage and is projected to be at 20% contingency reserve percentage at the end of 2025. This will keep the reserve in line with the goal of staying at or above the 20% contingency reserve threshold required by City policy at which measures must be taken including capital projects must halt, followed by budget cuts, and even lay offs if required to get back up to the 20% threshold. Richards said that the revenues are a little higher than they were at this same time last year but that may be attributed to a timing difference in franchise fees. He noted that sales tax revenue is down 1%. Of sales taxes, he stated “things are stable right now” though there had been a drop in March or April. Richards said “People are spending money. Our local economy is still good.”

Director Martin asked if there are any remaining “big ticket items we could shave off.” Richards answered that the didn’t know that that there is “anything realistically we can shave” but mentioned that the airport runway project is expected to likely finish up half a million dollars less than budgeted for. Director Christina Catsavis expressed frustration about the Board not being kept up-to-date with matters involving the airport saying “We have no idea what’s going on over there.”

Richards mentioned that there is still $1.9 million left to be paid out on the installation of the waterslides at Parrot Island. He also mentioned that there is about $1.5 million in federal DOT grant funds that have not been able to be drawn down in the last few months that will be coming in for the Transit Department.

The Streets fund is currently at a 70% contingency reserve that poses an opportunity for spending that money down. Director Settle pointed out that the very healthy streets funding is from the gas tax.

Richards called the Water and Sewer fund “a light spot.” Director Martin asked about the fund hitting the 110% ratio of revenues to operating expenses necessary to meet the bond covenants. Richards said that it is projected to hit 118%. Richards mentioned that the Solid Waste fund is facing challenges with increased expenditures from the increased costs of maintaining equipment.

Director Kemp expressed a desire to move forward with greater speed on selling the property the City owns near the airport to get that money into the general fund more quickly. Many other Directors chimed in to agree.

Director George Catsavis expressed displeasure with the amount being spent to subsidize the Convention Center.

Director Christina Catsavis said the “spending spree’s over. Budget items only.” Acting City Administrator Dingman said that in general the departments are being “mindful” of spending and of spending only 90% of their budget not the whole budgeted amount.

Director Kemp suggested getting projects under contract faster to help avoid inflation.

Director Good said of the overall positive outlook “We’re making the right moves.” Mayor McGill agreed that the outlook is “positive.”

On the agenda, the Board was slated discuss their top 5 or 6 Strategic Goals for the 2026 budget year. The Strategic Goals were last updated in 2023. The Board had viewed in the agenda packet some notes on the progress made and challenges still being faced regarding those goals set in 2023.

Director Settle expressed a preference for the day-long facilitated discussion session method for deciding the goals that has been used in the past. He said that it allows for a “free discussion.” Director Martin agreed calling that style an “opportunity to think through some things.”

Mayor McGill asked if department goals from the department heads would be incorporated into the discussion. Director Martin voiced his preference for the Strategic Goals to be based on “what we’re hearing from citizens” rather than input from the departments. Dingman agreed with Martin adding that the staff identifies Key Service Objectives that are centered around the Strategic Goals and comprehensive plans.

Director Rego and Director Kemp voiced support for a separate facilitated session.

Dingman will find dates and locations in August to be considered for the day-long facilitated session.

A meeting was scheduled for Thursday 8-7-25 for an Executive Session in which the Board and the Audit Committee will conduct a joint interview with Amanda Strange and James Carter for the vacant Director of Internal Audit position.