Fort Smith cutting shores up pensions

Police, fire funds get agencies’ $770,473

FORT SMITH -- Fort Smith city directors voted Tuesday to cut general-fund department budgets to add nearly $771,000 to the city's contribution to the underfunded fire and police pension program.

The greatest share of the cuts, $562,559, will be coming from the Police and Fire departments. City records show the Police Department will be cutting $400,000 in salaries and $69,119 in operating expenses and that the Fire Department cuts will total $79,170 for salaries and $14,270 in operating costs.

Acting City Administrator Jeff Dingman said the salary cuts were from employee positions that have become vacant or were left unfilled, plus overtime and benefits. No employees are being fired.

The directors voted to allocate the money without discussion Tuesday. The vote was 6-1.

City Director Andre Good voted against the allocation ordinance, preferring that the directors also transfer to the pension fund $314,538 in sales tax money that exceeded the estimated tax income for July. The other directors voted not to spend the tax money but to hold it unobligated in the general fund.

City directors had ordered heads of departments that are funded through the general fund to cut their budgets to provide the additional money for the fire and police pensions. The pensions are funded through the general fund.

The general fund provides funding for most of the city's departments, including the mayor's office, city clerk, planning and zoning, Police and Fire departments, parks, transit and building safety.

A memorandum from Deputy Finance Director Jennifer Walker said the department heads were able to make the cuts in spending without cutting services.

The departments came up with $946,909 in cuts, of which $770,473 will go to the pension funds. The remaining $176,436 cut from department budgets had been allocated from the city's enterprise funds -- sanitation and utilities -- and will revert to those funds, Walker said.

The city's contribution to the Arkansas Local Police and Fire Retirement System has fallen below the amount paid out to retirees. If it can't find additional money to meet its funding obligation, the retirement fund for city police and firefighters will run out of money in 2019.

The money the directors voted to put into the fund Tuesday will take care of the city's funding obligation for the rest of 2015. It's been estimated the directors will have to find $1.2 million more next year for the pension fund.

According to city records, most of the cuts the departments made were in operating costs such as repairs, small equipment, travel, advertising, postage, education and memberships.

The Transit Department cut $60,000 in fuel, nearly a quarter of its fuel budget for the year. It also cut $50,000 in salaries from positions that became vacant during the year, Transit Director Ken Savage said.

Savage said the department could give up the fuel money because of the drop in fuel prices this year. He said gas costs about $2.50 a gallon now but was almost $4 a gallon last year.

He said, though, the cuts leave his budget without any extra money in case problems arise. He's hoping none will crop up before the end of the year.

Metro on 08/20/2015

Upcoming Events