OPENPUBLICA · PUBLIC MEETING RECORD
Record of Proceedings

Fort Smith Board of Directors Study Session - August 26, 2025: Review of 2026 Service Objectives, Street & Drainage CIP, and Water Infrastructure Update

Meeting PortalTuesday, August 26, 2025
BodyFort Smith, Arkansas
SessionMeeting Portal
DateTuesday, August 26, 2025
StatusFILED
Video Record
0:00 / 3:11:27

Transcript — Verbatim
3:42

I am taking one to get this one.

3:48

Oh, you went.

3:56

Good evening.

3:58

And welcome to the fourth recitation board of directors' study session on this August twenty-sixth of twenty twenty-five.

4:16

With that, we will go to the first item on the agenda.

4:28

Departmental Service Objectives to the Finance Department in preparation of the twenty twenty-six budget cycle.

4:34

I'll turn this to Andy Richards to go through what was reported.

5:00

One of the first steps here is we have collected from all the different departments, the service objectives for 2026 as well as their KPI measurements and outcomes from their 2025 uh service objectives.

5:15

Now this was done.

5:17

These are uh compiled and put together um you know within the last couple weeks and then you had your your strategic uh session Friday.

5:27

Um so you know, if there's anything that needs to be implemented from the outcome, I mean we can definitely modify that as we go through the budget process.

5:37

Um, but I'll stand for any discussion or questions you have and answer them as best I can.

5:44

Okay.

5:44

Thank you very much.

5:45

This time we will uh go to the board director Rigo, you recognize.

5:49

Thank you, Mayor.

5:50

And I I have a uh variety of questions across a few different uh departments that I would you know hope the uh department head, if they're here, you know, would be able to to speak to.

6:03

There's kind of some clarifying questions based on the stuff that was written down here.

6:08

Is that all right?

6:08

Yes, you you may proceed.

6:10

Go ahead.

6:10

Well, the first ones uh are in city administration, that's the first um section there in the packet, and on page six, um there's a couple of things, Jeff, you know, talking about a service objective being identifying a solution for funding mechanisms to facilitate capital improvements for water treatment and transmission infrastructure.

6:30

Um you mentioned in the paragraph underneath there that you know there was a a suggestion around a rate increase providing capital funds that was not implemented, of course.

6:40

So, and then you it says here, and I assume you wrote this, no funding mechanism for these water projects exists, which I'm not disputing that characterization, but when you say that a main service objection is is trying to identify those funding mechanisms, I mean what what what do you have in mind?

6:57

What are you eyeballing?

6:59

Well, I'm I mean, in terms of more appropriately would say no funding mechanism has been determined, I guess, instead of exists.

7:06

I mean, it certain certainly does exist, and I think that it is it is going to be a um discussion that revisits uh water rates to some degree and uh you know uh any any other um funding that we can identify that can go towards those projects, and I don't know what that is currently.

7:22

And so I I just wanted I needed to mention it here because that needs to be something that we uh particularly as we as I think as we get through hopefully the modification of the consent decree, we get those projects bonded and underway and moving.

7:39

The the next focus, the the next main focus that we need to do is turn our attention to the water projects and how we intend to pay for those improvements that are needed.

7:48

And that's that's the I was trying to relay here.

7:52

Okay.

7:52

I think Director Martin had thoughts on this item as well.

7:55

I have a uh a question on city administrator.

7:58

So when you're done, I'd say that just had one other one under item three you talked, Jeff, about continuing to identify efficiency of city service delivery and facilities management administration intends to reorganize and right size city staff.

8:11

Uh talk a little bit uh for us about what right sizing means to you, because you talked about obviously the natural attrition uh of you know retirements or people stepping away, perhaps vacancies not being filled, uh but you also talk about reducing operating costs and ensuring that the city organization is not too big.

8:30

So I guess I'm looking for some definitional uh structure from you about what right sizing looks like and what your definition of too big is.

8:38

Right.

8:38

And as far as too big, I don't know.

8:40

But the but what it is, what I do know is that we have passed in 2025 we passed a budget that had an operational deficit.

8:47

And you know, we're we're starting the process for 2026 and we're looking at well what things are going to change uh as we look at the 2026 budget in order to make adjustments to live within.

8:59

I mean the board has has emphasized to me and others on staff, and Andy and I have agreed and you know, we've talked administratively as how are we going to uh put forth a 2026 budget that meets these goals that the board uh has has relayed to me in terms of uh not passing a an operating deficit.

9:18

Well there there are there are many ways to do that, but we've also talked about other needs that the departments have, equipment related and and things like that, that and we talked some the other day about we recognize that there are a lot of needs.

9:33

We recognize that there is a a finite amount of dollars to this, and if we're going to start meeting some of those needs in terms of equipment, well then other things need to give.

9:42

We have financial policies in place that's you know, if we're uh going to budget a um anything that it starts uh putting a uh our reserve fund at less than 25 percent, then we're not supposed to consider capital in addition of capital.

10:00

If it gets well, I think below 20 percent, we're supposed to start talking about reducing the staff sizes.

10:03

And so um that that's is really where we're getting to.

10:07

If we're looking at do we have too many people on staff, do we have too many budgeted positions?

10:12

Can we afford to allow vacant positions to uh to expire or go away or be removed from our budgeted list?

10:20

And and that's where we that's where we start talking.

10:23

Do we have, you know, I think eleven eleven hundred or so, eleven twenty-one in terms of budgeted full-time positions.

10:31

Is that too many for our uh town our size with the revenues that we have and the the uh the things that we need to accomplish with our budgets?

10:40

Okay, and then the last thing I had in there was uh a couple sentences later you say for 2026 administration prefers to pull back new initiatives.

10:49

What new initiatives would you like to see pulled back?

10:52

Well, in terms not specific new initiatives, but anything in addition to what we're trying to do.

10:58

I think there is a and you know, the this is my impression of staff is that they we feel like we have a lot of things that we're trying to catch up on or finish before we start into something new.

11:08

And my my impression with with these sentences, these this phrase is to say, you know, we need to focus on the things that we're currently doing, finish those, get those in a good place before we then try to go on with something new.

11:22

Because I think that I think that goes hand in hand with some of the the comments I just made in terms of uh staff has a finite amount of time, we have finite amount of resources to dedicate to doing projects.

11:34

We need to do the ones that we are doing and do them well before embarking on something new.

11:39

Now, obviously that doesn't mean if there's a a new board objective or the new direction from the from the board or the residents, frankly, that says we need to do another particular thing.

11:49

We certainly will we'll give a look at that.

Discussion Breakdown — Share of Meeting
Water And Wastewater Management████████████████████████████28%
Infrastructure and Engineering███████████████████████23%
Public Works Planning███████████11%
Budget Equity Analysis█████████9%
Public Safety██████6%
Fiscal Sustainability█████5%
Personnel Matters████4%
Public Engagement███3%
Procedural███3%
Summary of Proceedings

Fort Smith Board of Directors Study Session - August 26, 2025

The Fort Smith Board of Directors held a study session on August 26, 2025, beginning at 6:00 p.m., to review departmental service objectives for the 2026 budget cycle, the proposed ten-year Capital Improvement Plan (CIP) for streets, bridges, and drainage funded by the reduced 5/8% sales tax, and an update on the 48-inch water transmission line and Lake Fort Smith Water Treatment Plant upgrade. The meeting also included a brief review of the preliminary agenda for the September 2, 2025 regular meeting.

Discussion Items

1. 2026 Departmental Service Objectives (Finance)

  • Chief Financial Officer Andrew Richards presented compiled service objectives and key performance indicators (KPIs) from all departments, based on 2025 outcomes.
  • Directors raised concerns about the lack of specificity in many objectives, particularly in the City Administrator's section on homelessness and housing. Director Neal Martin stated he wanted “percentages, decreases by X amount, increases by X amount” across all departments, citing the Police Department's detailed objectives as a model.
  • Acting City Administrator Jeff Dingman explained that the 2026 budget must address an operational deficit, and that “right-sizing” staff through natural attrition and evaluating vacant positions is under consideration. He noted that the city has approximately 1,121 budgeted full-time positions and that financial policies require reducing staff if reserves fall below 20%.
  • Discussion included the need for a long-range financial plan, with Richards noting that the finance department is developing a forecasting model.
  • Human Resources objectives were revised for 2026 to focus on future initiatives rather than routine metrics, including a partnership with the Peak Innovation Center to recruit high school seniors.
  • The Police Department's objectives were commended for their specificity, including targets such as a 10% reduction in water leaks, a 20% reduction in animal cruelty cases, and a 15% reduction in trespassing incidents.
  • Water Utilities reported a current water leak pending list of 643 leaks (as of June 30, 2025), far above the 2025 target of under 100. Director Martin expressed frustration and suggested a more realistic target of under 500 for 2025 and under 250 for 2026.
  • Streets and Traffic Control reported that mowing of drainage areas is performed three times per year, but staffing shortages have delayed some cycles. The department noted it has taken on five interstate interchanges previously maintained by Keep Fort Smith Beautiful.

2. Sales and Use Tax for Streets, Bridges, and Associated Drainage – Capital Improvement Plan (Engineering)

  • Interim Engineering Director Ben Marts presented a revised ten-year CIP reflecting the reduction of the street sales tax from 1% to 5/8% following the May 2025 special election. Revenue projections were updated downward by approximately $1.3 million per year starting in 2027.
  • The proposed 2026-2035 CIP includes $11.36 million for street overlays in 2026, $5.74 million for neighborhood drainage, and $3.6 million for levee/bank stabilization. The plan shifts several projects to later years to balance the budget.
  • Marts noted that only one engineer is currently in the department, creating a bottleneck. He is attending a career fair at the University of Arkansas to recruit additional engineers.
  • Consent decree-related overlay projects (25-03-B, C, D) are time-sensitive and were not delayed, but other projects, such as the Towson Avenue utility relocation, remain unfunded. The estimated cost to move utilities along Towson Avenue is $30 million, with no funding identified.
  • Director Lee Kemp requested that the Jenny Lind overlay project (from Heather Oaks to Brook and Hill) be kept on the schedule; it is currently listed for 2026-2027.

3. 48-Inch Transmission Line and Lake Fort Smith Water Treatment Plant Upgrade (Water Utilities)

  • Water Utilities Director Lance McAvoy provided an update, noting that the city is currently producing over 50 million gallons per day (MGD) at peak, pushing the Lake Fort Smith plant to its maximum sustainable capacity of 38-40 MGD. The Lee Creek plant is limited to 10 MGD drawdown during dry months.
  • The 48-inch transmission line, when completed, will deliver up to 48 MGD by gravity from Lake Fort Smith. Phase 1 (6 miles) is complete; Phase 2 (9.3 miles) is under design; Phase 3 (8.9 miles) is 60-90% designed; Phase 4 (2.1 miles under the Arkansas River) will require a construction manager at risk; Phase 5 (4.2 miles) needs route finalization, with a preferred route along Frontier Road opposed by ArcBest.
  • Total estimated cost for the transmission line and plant upgrade ranges from $328 million to $585 million. Currently, only $15 million in federal funding is secured (a $12 million congressional earmark and a $3 million match).
  • McAvoy stated that without additional funding, the project would take 6-8 years if fully funded. The city may need to consider bonding and rate increases or a sales tax to finance the work.
  • Directors discussed the possibility of applying for additional federal grants, particularly related to the Ebbing Air National Guard Base and rural utilities, and the need for a military liaison to leverage Department of Defense funding.

Key Outcomes

  • No formal votes were taken as this was a study session.
  • Directors directed staff to provide more specific, measurable objectives in the 2026 service objectives, with clear targets and percentages.
  • The Engineering Department will continue to refine the CIP based on board feedback, with a focus on maintaining consent decree-related projects and addressing staffing shortages.
  • Water Utilities will continue to pursue federal funding for the transmission line and plant upgrade, and staff will bring further discussion on funding options to a future study session.
  • The Board acknowledged the need for a comprehensive funding strategy for water infrastructure, potentially involving bonding, rate adjustments, or a sales tax initiative.

Consent Calendar

  • No consent calendar items were presented.

Public Comments & Testimony

  • No public comments were made during the study session.

Meeting Transcript

I am taking one to get this one. Oh, you went. Good evening. And welcome to the fourth recitation board of directors' study session on this August twenty-sixth of twenty twenty-five. With that, we will go to the first item on the agenda. Departmental Service Objectives to the Finance Department in preparation of the twenty twenty-six budget cycle. I'll turn this to Andy Richards to go through what was reported. One of the first steps here is we have collected from all the different departments, the service objectives for 2026 as well as their KPI measurements and outcomes from their 2025 uh service objectives. Now this was done. These are uh compiled and put together um you know within the last couple weeks and then you had your your strategic uh session Friday. Um so you know, if there's anything that needs to be implemented from the outcome, I mean we can definitely modify that as we go through the budget process. Um, but I'll stand for any discussion or questions you have and answer them as best I can. Okay. Thank you very much. This time we will uh go to the board director Rigo, you recognize. Thank you, Mayor. And I I have a uh variety of questions across a few different uh departments that I would you know hope the uh department head, if they're here, you know, would be able to to speak to. There's kind of some clarifying questions based on the stuff that was written down here. Is that all right? Yes, you you may proceed. Go ahead. Well, the first ones uh are in city administration, that's the first um section there in the packet, and on page six, um there's a couple of things, Jeff, you know, talking about a service objective being identifying a solution for funding mechanisms to facilitate capital improvements for water treatment and transmission infrastructure. Um you mentioned in the paragraph underneath there that you know there was a a suggestion around a rate increase providing capital funds that was not implemented, of course. So, and then you it says here, and I assume you wrote this, no funding mechanism for these water projects exists, which I'm not disputing that characterization, but when you say that a main service objection is is trying to identify those funding mechanisms, I mean what what what do you have in mind? What are you eyeballing? Well, I'm I mean, in terms of more appropriately would say no funding mechanism has been determined, I guess, instead of exists. I mean, it certain certainly does exist, and I think that it is it is going to be a um discussion that revisits uh water rates to some degree and uh you know uh any any other um funding that we can identify that can go towards those projects, and I don't know what that is currently. And so I I just wanted I needed to mention it here because that needs to be something that we uh particularly as we as I think as we get through hopefully the modification of the consent decree, we get those projects bonded and underway and moving. The the next focus, the the next main focus that we need to do is turn our attention to the water projects and how we intend to pay for those improvements that are needed. And that's that's the I was trying to relay here. Okay. I think Director Martin had thoughts on this item as well. I have a uh a question on city administrator. So when you're done, I'd say that just had one other one under item three you talked, Jeff, about continuing to identify efficiency of city service delivery and facilities management administration intends to reorganize and right size city staff. Uh talk a little bit uh for us about what right sizing means to you, because you talked about obviously the natural attrition uh of you know retirements or people stepping away, perhaps vacancies not being filled, uh but you also talk about reducing operating costs and ensuring that the city organization is not too big. So I guess I'm looking for some definitional uh structure from you about what right sizing looks like and what your definition of too big is. Right. And as far as too big, I don't know. But the but what it is, what I do know is that we have passed in 2025 we passed a budget that had an operational deficit. And you know, we're we're starting the process for 2026 and we're looking at well what things are going to change uh as we look at the 2026 budget in order to make adjustments to live within. I mean the board has has emphasized to me and others on staff, and Andy and I have agreed and you know, we've talked administratively as how are we going to uh put forth a 2026 budget that meets these goals that the board uh has has relayed to me in terms of uh not passing a an operating deficit. Well there there are there are many ways to do that, but we've also talked about other needs that the departments have, equipment related and and things like that, that and we talked some the other day about we recognize that there are a lot of needs. We recognize that there is a a finite amount of dollars to this, and if we're going to start meeting some of those needs in terms of equipment, well then other things need to give. We have financial policies in place that's you know, if we're uh going to budget a um anything that it starts uh putting a uh our reserve fund at less than 25 percent, then we're not supposed to consider capital in addition of capital. If it gets well, I think below 20 percent, we're supposed to start talking about reducing the staff sizes. And so um that that's is really where we're getting to. If we're looking at do we have too many people on staff, do we have too many budgeted positions? Can we afford to allow vacant positions to uh to expire or go away or be removed from our budgeted list? And and that's where we that's where we start talking. Do we have, you know, I think eleven eleven hundred or so, eleven twenty-one in terms of budgeted full-time positions.

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