Fort Smith Board of Directors Special Study Session on FY2026 Budget – September 11, 2025
Fort Smith Board of Directors Special Study Session on FY2026 Budget – September 11, 2025
The Fort Smith Board of Directors held a special study session on September 11, 2025, starting at 5:30 p.m. at the Blue Lion, to review the preliminary Fiscal Year 2026 General Fund budget. The meeting was called by Directors George Catsavis, Christina Catsavis, Neal Martin, and Kevin Settle. Acting City Administrator Jeff Dingman and Finance Director Andy (likely Andy) presented the budget overview, revenue projections, expenditure allocations, vacancy trends, and specific requests from the Fire, Parks, and Police departments. The session concluded with a discussion on scheduling further budget study sessions.
Consent Calendar
- No consent calendar items were presented.
Public Comments & Testimony
- No public comments were taken during this study session.
Discussion Items
- Budget Comparison Summary: The projected deficit for FY2026 is $10.1 million, down from an earlier estimate of $11.8 million. The general fund contingency reserve percentage is projected at 24% by the end of FY2025. Revenue for FY2026 is projected at $53.5 million, with conservative estimates for sales tax (flat) and a 10% increase in property tax due to reassessment. The $1.3 million transfer to the River Valley Communications Center was added, impacting the deficit.
- Revenue Comparisons: Sales tax projections are flat based on the last 12 months. Interest income is expected to decline from record levels in 2024. The 911 funds were moved to a separate fund, reducing intergovernmental revenues.
- Dollars Available to Spend: The target allocation exercise showed that if departments spend at historical percentages, a balanced budget would yield a 33.4% reserve fund balance, while hitting the 25% target would require cutting $3.5 million from the current $10.1 million deficit.
- Turnover and Vacancies: Citywide turnover is 18%, comparable to the national benchmark of 17.8%. There are 35 vacant positions (24 non-uniform, 5 fire, 6 police). Freezing all non-uniform vacancies would save approximately $275,000 annually for the general fund. Most utilities vacancies were addressed in May cuts.
- Fire Department (Chief Boyd): The department presented a budget with capital requests of $390,000 for vehicles and equipment, including two Tahoe SUVs and a compressor for Station 7. The department is extending apparatus life through refurbishment ($1.1 million for two pumpers vs. $2.4 million new). The 1/8-cent sales tax is estimated to expire around 2030-2032, which would shift $3.1 million in costs to the general fund. No additional cuts were recommended by the chief.
- Parks Department (Director Sarah): The department reduced personnel and operations by $275,000 from the original budget and added $327,000 in capital requests (three trucks, two mowers). Sarah proposed pulling back on the ACME property master plan amendment ($175,000) to help with the city's financial position. Cemetery operations cost $280,000 in FY2026, with projected revenues of $100,000, but the board expressed concern about expanding cemetery services given budget constraints.
- Police Department (Chief Baker): The department's net increase over FY2025 is approximately $98,000 after accounting for the 2.5% sales tax contribution and removal of capital items. Chief Baker recommended holding off on the $1.25 million request for a second precinct/regional training facility due to financial constraints, but supported keeping the $143,000 for EMS upgrades. He proposed a 10% raise for sworn officers funded entirely by the sales tax, not impacting the general fund. A fleet leasing program was introduced to cover vehicle costs without future capital requests. Jail costs are rising (over $100,000/month in June/July), and the chief suggested moving the jail budget out of the police department. The department currently has 7 sworn vacancies, with starting pay at $50,000 compared to state police at $67,000.
- Scheduling Future Sessions: Directors discussed additional study sessions for utilities and solid waste. A Thursday, September 18, 2025 session was proposed for utilities, contingent on board concurrence. The next regular study session on September 23 will include a solid waste presentation.
Key Outcomes
- No formal votes were taken. The board directed staff to refine budget numbers and prepare for follow-up sessions.
- The board concurred with the police chief's recommendation to defer the $1.25 million second precinct request and focus on the $143,000 EMS upgrade.
- The parks director's proposal to withdraw the ACME master plan amendment ($175,000) was noted for further discussion.
- The fire department's capital requests were accepted for further review, with an emphasis on apparatus replacement funded by the sales tax.
- The board will schedule a dedicated study session for utilities, likely on September 18, 2025, and will proceed with the September 23 study session on solid waste.
Meeting Transcript
Good evening folks. Sorry for the slight delay. We're going to go ahead and get started with the special study session that we have about budget items just as a matter of notification for everyone. This meeting won't conclude no later than 7.30 this evening. So Mr. Dingman, would you please get us started with our agenda for tonight? Thank you, Vice Mayor. This evening, starting with uh review of the budget comparison summary from the general fund. And as we're going through, we have a plethora of paperwork in front of us. Could you please point out to us where we are as we move through each of these items? Certainly, sir. The first thing that I want to talk about, I've got it on the screen, but this is freshly up. I don't have this printed out. Um, but just and we've and you've looked at this before, but you know, we continually keep to update this as we um meet with individual departments and and uh try to trim um projections and and also budgets. And so what we have today shows that uh for our fiscal year twenty-five projected, just look at the bottom line. We've um we've trimmed our budget, I guess deficit our revenues less our expenditures. So we were the amended was at 19.4, and we've got it the projected now to 17 and a half. So we've made some fairly significant progress there. What are we looking at here? This is the general fund. Right, but where is that? We don't have to. I don't have I we just got this updated, but I wanted to kind of show you where we are, and these totals will be reflected in this other handout I have for you. So but anyway, I just wanted to point out. So our if we're looking at our contingency uh reserve percentage, we're estimating twenty-four percent by the end of uh twenty-five. And then we're also you know, are we also working through the twenty-six budget request. And I don't know that we we've updated as much as we can. I think there might be even some more updates. We just haven't gotten them in here yet. But at this point, um we're showing a 10 million dollar uh deficit in 26, showing a 7.7 million dollar fund balance at 12 percent. So Andy, could I ask a quick question? When we buy when we do things that are not tied to departments like water slides or or other purchases that are going to be added, that's coming from the general fund. Where is it categorized on this image on the screen? Non-departmental. It's that last expenditure line item. Okay, thank you. So non-departmental will have things that we do. Um, it'll it'll have things like the water slides typically. We bought the building, uh that you know, that's in that category. Also transfers that we make to other funds like to the lofty contribution fund and the convention. Cabanis land, is that in that too? What's that? The cabanis land, the two million from their non-departmental funds? Yeah, because it wasn't for a particular departmental purpose. It was just a and the property sales happen. Uh will those go back to non-department. Will they go back to the go straight back to the general fund as revenue, yes? Okay, thank you. You you you are you're referencing the cabanas property. That actually closed in 24, right?
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