City looks to 2020 surplus to pay for anticipated deficit

FORT SMITH, Ark – If all department requests are approved, the city of Fort Smith is expected to exceed its budget by almost $4.2 million in 2021.

But city officials expect to put their projected $3.5 million surplus toward paying for these requests, City Administrator Carl Geffken said.

“We have the ability to do some things, possibly, for the departments that will make them more efficient in the longer term,” Ward 3 City Director Lavon Morton said at a study session Tuesday, referencing the surplus.

According to records, the city was initially projected to have a $928,313 deficit before the new requests. The requests if fulfilled would raise the deficit more than $3.86 million.

More than half the value of the requests comes from one-time capital needs and initiatives, including $1.3 million for Utilities. IT has requested $702,000 in capital improvements; Solid Waste has requested $207,000 in improvements. Five other city departments requested capital projects that didn’t exceed $100,000.

Requests from the Fort Smith Police Department will be paid out of the roughly $3.4 million CARES Act surplus allocated to Fort Smith. They have requested $332,562 in recurring costs to hire enough dispatch supervisors to have 24/7 dispatcher supervision. This request comes more than a year after former police dispatcher Donna Reneau told newspaper carrier Debbie Stevens to “shut up” before she drowned inside her vehicle.

CARES Act funds will also help pay for $149,000 in recurring and one-time Parks Department expenses, including additional positions. Geffken said Parks Department operations were scaled back to compensate for the anticipated economic impact of COVID-19 and suffered overgrown grass following heavy rains in 2020.

City directors in their Nov. 6 budget hearing said parks maintenance would help make the case to renew their 0.125% sales tax that helps fund the city amenity. The tax, which each fiscal year has brought in $2.4 million, is set to sunset in 2022 unless renewed in a special election before then.

“If it fails, we don’t have a backup,” outgoing Ward 1 City Director Keith Lau said.

Geffken explained that some of these requests were tabled in the 2019 budget hearings in light of discussions at the time over whether they should add additional revenues to the 2020 budget. The board at the time approved a salary survey for city employees and some funds for the Transit Department but did not fulfill the majority of the requests for this reason.

The $3.5 million surplus to help remediate this anticipated deficit came after the city went forward with a 10% budget decrease after COVID-19 ramped up in March. This, plus sales tax revenue that in most months of 2020 has been higher than in the same months of 2019, also contributed to the surplus.

Geffken said the city will have enough money in the surplus to be fully functioning, pay for items they need and continue to improve services in the city.

“We can move forward with this and not have to be worried that we don’t have sufficient funds to operate the city, because we do,” Geffken said.

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