FORT SMITH -- Fort Smith city directors plan to consider next week an ordinance setting a May 12 special election on renewing a 30-year-old, 1 percent sales tax for streets that will ask voters to carve out 5 percent of the tax proceeds for trails and bikeways.
Directors decided to drop a proposal to include a 10 percent allocation of tax proceeds for city police and fire pensions in the ordinance.
City Director Keith Lau said Tuesday that building trails and bikeways were capital expenditures like the street, bridge and drainage projects now funded by the tax, so it would be an appropriate use of the tax revenue.
But funding for fire and police pensions is related to personnel, and its funding should be considered separately, Lau said. The other directors concurred.
At Tuesday's study session, directors said they want the ordinance to propose that voters decide separately on first continuing the tax for 10 years and then on whether to allocate 5 percent of the revenue for development of the proposed 35-mile trails and bikeways system in the city.
Drew Linder, chairman of the trails and bikeways committee, told directors Tuesday that the system, which could cost as much as $17.5 million, would consist of multiuse trails and bikeways on city roads. The connected trail network would ring and run through the city.
The committee is holding public forums on the proposed system and is expected to present its recommendations to city directors this spring, City Administrator Ray Gosack said.
"We think this is a good plan and will be a good use of public funds," Linder told the board Tuesday.
With the tax now generating about $20 million a year, directors calculated that 10 percent would raise $20 million over the 10 years of the tax for trails and bikeways. Five percent of the tax would generate $10 million over the 10-year tax term.
Directors decided to reduce the percentage of the trails and bikeways money they planned to allocate from 10 percent to 5 percent to keep more money available for street improvements. Instead, they will seek to rely on private contributions and public grants to augment trail funding.
Committee member Bill Hanna told directors there is interest in Fort Smith's corporate community in contributing to the trail system, although he didn't have any estimate on the amount that corporate partners could be expected to give.
"I think 10 percent does not recognize contributions that could be made by other partners," City Director Tracy Pennartz said.
Dropping the fire and police pensions from the tax proposal and reducing the percentage for trails and bikeways may blunt some opposition that has arisen to the tax proposal.
"I've had people say if this is on the ballot, 'I'm not voting for the sales tax,'" City Director George Catsavis said.
Resident Jerry Fleming asked directors during a public meeting last week to not consider diverting the tax money for other purposes. He said every penny from the tax is needed to maintain the city's streets.
Fort Smith Police Chief Kevin Lindsey said Tuesday that the feedback he's received from the public has been against diverting any money from street work.
Fort Smith city directors also are looking for money to supplement the city's contribution to the Arkansas Local Police and Fire Retirement System for its police and fire department employees. Earlier this year, they were told that the city's contribution to the fund will come up $2 million short of its obligation by 2019 if directors do nothing to supplement the money it now provides.
The projected shortfall "is uppermost on everybody's mind at the department," Lindsey said.
Lindsey declined to comment on the directors' decision to drop pension funding from the sales tax renewal question.
Fire Chief Michael Richards said he had no problem with the directors removing pension funding from the sales tax issue. There are other funding options the city could take advantage of, and the directors have already committed to finding more money for the city's fire and police pensions, he said.
He also said that the state Legislature, which began meeting Monday, could come up with way to help the city increase funding for the pensions, since other cities in the state are experiencing the same problem.
Metro on 01/15/2015