FORT SMITH -- City directors approved a budget for 2018 last week but were split on two measures that would generate more than $1 million to help hire more police officers and upgrade police equipment.
City directors voted to pass a $128.5 million operating budget that includes spending for the general fund, street maintenance, water and sewer and sanitation.
Some city directors said they might ask later to amend the spending plan to add or delete some items, such as a vehicle leasing program or capital purchases for the Water and Sewer Department.
The board passed by votes of 4-3 an ordinance to add a $100 fee for a business license and an ordinance to raise the city's franchise fee from the current 4 percent to the maximum 4.5 percent.
All three at-large directors -- Don Hutchings, Tracy Pennartz and Kevin Settle -- voted against the business license fee. Hutchings, Settle and George Catsavis voted against the franchise fee increase.
City Clerk Sherri Gard said since the ordinances did not get five votes to pass on a single reading, the ordinances would not go into effect until after they have been read twice more in separate meetings, during which city directors could change their votes.
A special meeting has been scheduled for noon Tuesday to take up the second reading of the ordinances.
The $100 business license fee is estimated to generate $471,225 for the general fund next year, and the franchise fee, with the increase, would raise $554,000, according to budget figures.
When city directors discussed the fee increases earlier, they indicated they wanted the money to go to help pay the estimated $700,000 needed to fill 13 police positions that have been vacant because of a lack of money. City officials have said the Police Department needs another $500,000 for new equipment such as patrol cars, car radios and stun guns.
But Settle complained at Tuesday's meeting that he thought it was unfair to burden local businesses with higher expenses when the trend nationally is toward lowering taxes, and that the financial obligation would be put on the backs of a small group, the approximately 4,800 businesses operating in Fort Smith.
He and others on the board also complained that once the money goes into the general fund, there was no guarantee it would be used for police needs and could be spent on any number of general fund expenses.
"What are we doing here?" Hutchings said.
He noted that Fort Smith has asked residents to pay more and more, such at tripling sewer rates to fund sewer system repairs under a federal consent decree.
"People are hurting," he said.
City Director Andre Good, who voted in favor of the two fees, said the people, not business owners, were the backbone of the city and that they needed as much police protection the city could afford to give them.
The board had considered the business license fee, the franchise fee increase and other sources to generate more revenue for the general fund, which has experienced lean times over the past several years.
The general fund provides money for most departments, and 70 percent of the revenue goes to fire and police protection.
Another new revenue source for the general fund that was included in the 2018 budget is a water/sewer franchise fee that is supposed to add $100,000 to the fund. City Finance Director Jennifer Walker said the fee is a transfer of surplus revenue, less than 0.25 percent, from the water/sewer fund to the general fund instead of charging the fee to water/sewer customers.
City directors also decided to reduce the burden on the general fund by shifting payment of the city's annual contract with the Sebastian County Humane Society, totaling $248,000, from the general fund to the sanitation fund.
The 2018 budget provides that all employees will get a 2.5 percent cost-of-living raise except fire and police employees in the step program. They will get step raises. The education incentive program also will be expanded from fire and police to all city employees.
The cost of the raises and education incentive total just more than $2 million, according to the budget.
Earlier this year city directors considered a switch to leasing the city's fleet of vehicles rather than owning them. The budget includes the fleet leasing program that will cost $1 million. The program is estimated to save the city as much as $2.5 million over 10 years.
Spending in the Water and Sewer Department is budgeted next year for $60.5 million, with most of it going to fulfill the demands of the federal consent decree against Fort Smith. Included are $5.8 million in capital expenses, with $3 million of that going toward a water meter replacement project.
State Desk on 12/10/2017