’12 city budget called spare

FORT SMITH — Fort Smith is continuing its trend of bare bones budgets because of a sluggish economy and stagnant revenue.

City directors received copies of the proposed 2012 budget during Tuesday’s weekly meeting. The directors will review the proposed budget at sessions scheduled for Nov. 10 and 17 with a vote to approve the budget expected at their Dec. 6 meeting.

Fort Smith City Administrator Ray Gosack said department heads have kept their budgets lean over the last four years and there will be little to cut during the budget sessions without affecting core services and staff levels.

“It’s another lean budget year, but we have the resources to continue providing services citizens are accustomed to,” he said.

The 2012 budget proposes expenditures of $221.2 million, a $3.2 million decrease from the expenditures in the $224.4 million budget the directors adopted for 2011.

The operating budget totals $97.7 million, which is nearly $480,000, or a half percent, less than the operating portion of this year’s $98.1 million budget. Decreases also are expected next year in capital improvements, debt service, pension programs and in workers’ compensation and insurance programs.

But the special projects section of the operating budget will increase by 62 percent to about $4.9 million with the addition of $1.8million in revenue for the Fort Smith Convention Center. The fund will get the additional money if voters approve a 1 percent prepared food tax in an election Tuesday.

Of concern to city officials over the past few years has been the lack of revenue for the general fund, which pays most of the wages for city employees and funds fire and police services and parks. The general fund also will have to bear the convention center expenses if voters reject the prepared food tax.

Expenditures in the general fund are budgeted at $40.2 million for next year, a decrease of nearly 2 percent from this year’s expenditures. Gosack said one reason for the anticipated drop in revenue is that Fort Smith is not likely to see a repeat of the summer’s record high temperatures. Electricity use soared this summer and, with it, the franchise fees the electric companies pay to thecity.

It also was noted in the budget that the city will continue to decrease funding for the employee wellness fund, which has been overfunded in the last few years, to limit general fund expenditures.

And, “No funds are included in the budget for employee pay raises,” Gosack said.

There will be few changes in capital expenditures next year, but Gosack said voters will be asked in the spring to renew a 1 percent sales tax.

If passed, the revenue from the tax would go to continued government-mandated wet weather sanitary sewer improvements, construction work on a new water transmission line from the water treatment plant in Mountainburg, improvements to the Fort Smith Fire Department and a water park and ball fields at Ben Geren Regional Park.

Fire Chief Mike Richards said the department needs to replace three pumper trucks and three ladder trucks that it could not afford to replace in recent years. The tax money also would finance the construction of a new fire station at Chaffee Crossing.

The budget contained some good news. The Water and Sewer Department and the Sanitation Department anticipate no rate increases next year. Gosack said the Water and Sewer Department’s finances were revamped this year to bring its debt coverage rate within required limits and water consumption increased over the last year, bringing in more revenue.

The Sanitation Department retired its long-term debt this year, leaving the department debt-free.