Highlights of the Fort Smith Board of Directors Meeting 1/28/25

At the Fort Smith Board of Directors study session meeting held 1-28-25 with Director Rego absent, the Board discussed the appeal of the zoning changes for 5300 Heather Ridge that would allow for the 43 acre property to be developed into the Treetops of Fort Smith with a 5.78 acre mixed-use section in the interior of the property and the rest to be developed with residential (a mix of single family houses and multi-family dwellings). The entire plan for the property would include 26,000 sq ft of commercial space and 385 apartment units. A traffic impact study that was conducted indicated that the intersection at South 58th and Boston would likely need to be upgraded to a 3-way stop in the future to accommodate the added traffic from the development.

The vote at the Planning Commission meeting regarding the property was tied. Deputy City Administrator Rice clarified that the approval for that sort of zoning change is required to have a majority vote of the Planning Commission, 5 members, vote in favor of the change, regardless of how many members are in attendance at the meeting. 3 members of the Commission were absent at that meeting. 3 voted in favor and 3 voted against the zoning change.

Mark Rouse, the developer of the property, spoke and said that the mixed use area is intended “not to draw outside traffic” but rather to provide amenities that are walkable for the neighborhood residents. He said that commercial uses for the mixed use building will be “very light scale low impact” and that there is “no intent of a grocery store.” Director Settle asked if Rouse foresees semi-trucks needing to come in and out to service the commercial uses. Rouse said that he did not, that there would not be any businesses big enough there to need that. Director Settle asked about swimming pools in the development. Rouse answered that there would be one in the mixed use area and two in other parts of the development.

At the invitation of Director Kemp, Sharon Gosnell, a resident of the neighborhood near the proposed development, spoke in opposition to the zoning change. She expressed concerns about traffic and opposition to having housing units attached to the commercial units. She also expressed concerns about the commercial units being able to sustain profitability and possibly going vacant.

Director Martin asked what the rent would be on the residential units attached to the commercial units. Rouse explained that the commercial units would be on the bottom floor of the building and the residential would be on the two floors above it. He said that it would be a “modern type building.” The apartments above the commercial space would rent for $1500-$2500 per month. The apartments elsewhere in the development would average $800-$1800 per month. Director Martin said that that price point is “pretty significant, more than my house payment.”

The zoning change will be up for a Board vote at a future meeting.

The Board discussed the results of the third-party cost allocation plan. The study was conducted and the resulting plan was crafted to ensure the costs benefiting multiple departments and funds are distributed fairly among each department based on the benefits received. The biggest changes recommended in the proposed plan from the current plan are that the Mayor’s budget have a 22% decrease from the General Fund a 1% decrease from the Streets Maintenance Fund and an increase of 10% from the Streets Sales Tax and a 13% increase from the Water and Sewer operating fund, and for the City Attorney’s budget to have a 32% decrease from the General Fund, a 16% decrease from the Sanitation Operating Fund, and a 21% decrease from the Streets Maintenance Fund, and a 22% increase from the Street Sales Tax, and a 47% increase from the Water and Sewer Operating Fund.

Director Settle suggested that instead of the proposed plan, that the Mayor, Board of Directors, City Attorney, City Administrator, and Sustainability Department be funded entirely out of the General Fund.

Director Christina Catsavis asked if the budget reflected the City no longer covering the processing fees for utility bill payments. Finance Director Richardson said that it did not. Director Christina Catsavis responded “Let’s get ‘em out.” Director Martin reminded that the City would have met its bond covenants if they had not covered those fees because the shortfall in revenue versus expenses was so narrowly short of meeting the bond covenants. Richards agreed but said that meeting the covenants for 2024 and 2025 will have a “lot bigger issues” than that and without making significant changes the City will have “material covenant violations.” Director Martin asked if the raised water rates for 2024 will allow the City to meet the covenants. Richards answered “I’m not seeing that right now.”

Director Martin suggested that “We have to keep as much money as possible going into water and sewer.” He voiced his view that the City should adjust the allocations so that less money comes out of the Water and Sewer fund. He pointed out that $9.1 million is coming out of Water and Sewer to other departments. He said “We cannot accept these allocations.” He also said “We spent the heck out of the general fund in 2024.”

Director Kemp expressed concerns about falling short of the bond covenants but also expressed concerns about using the General Fund too heavily. He voiced concern about coming too close already to the 20% contingency reserve required for the General Fund. He said “We’ve gotta watch this General Fund.” Director Settle clarified that if the General Fund falls below the 20% contingency threshold that capital projects must halt, followed by budget cuts, and even lay offs if required to get back up to the threshold. Director Settle also pointed out that the 5 departments he suggested be funding solely through the General Fund would total a cost of $2.3 million and that currently the allocation for them is coming half from Water and Sewer.

Director George Catsavis asked Richards his forecast for revenue for the year. Richards said that it may likely be flat but that he is “optimistic we’re gonna have some growth some time.” Director Martin reminded that the previous year was already a record breaker and said “Flat is still a record.” Richards said “Inflation has deathly impacted us in every department and category.”

Director Kemp expressed concerns about the cost of fixing water leaks and advocated for the prioritization of fixing water leaks.

The Board discussed plans to hold the first study session meeting of the month for 4 consecutive months at locations in each of the 4 different wards instead of in the Blue Lion Building downtown where they are typically held. The meetings held in the wards would likely start in March. Interim City Administrator Dingman said that sites have been identified to host the meetings, The Bakery District for Ward 1, Elm Grove Community Center for Ward 2, Fort Smith Senior Center for Ward 3, and Fire Station 11 for Ward 4.

Director Settle reminded that the Board used to have Ward meetings at locations in each ward in addition to the regular Board meetings and study session meetings. He said that with a new Board member, meeting out in the wards would “get us out in the public.”

Director Christina Catsavis said that she has received feedback from the elderly that some of them do not feel comfortable attending meetings at the Blue Lion because of issues navigating the one-way streets and parking.

Director Settle suggested that the site for the Ward 1 meeting be held at UAFS since the Bakery District is “just a few feet away” from the Blue Lion. Dingman said that the Main Library and the Reynolds Room at UAFS are not available to host the March meeting. Director Settle said that the meetings for each ward could go out of numerical order, that it need not be Ward 1 first, suggesting “whatever makes it work” to be able to use the University.

Director Good reminded that in the past when they held the ward meetings the turnout for those meetings “weren’t that great”, often with more City staff in attendance than members of the public. He said that citizens know where to come when the meetings are held at the Blue LIon and that he has heard some feedback in opposition to moving the meetings.

Director George Catsavis agreed with Director Good that the ward meeting turnout was low, calling it “awful, terrible.” Director George Catsavis asked about sound and live streaming capabilities for the meetings held at other locations. City Clerk Gard answered that live streaming would not occur at those locations because they will not be set up for that. She said that there would be audio recording of the meetings as required by State law. Director George Catsavis expressed his preference for keeping the meetings all at the Blue Lion saying “I’m happy here.”

Director Christina Catsavis said “People are more engaged than they used to be.” Director Kemp said “I think it’s worth trying.”

The Board briefly discussed moving the study session meetings to the back room in the Blue Lion building as soon as the A/V capabilities are ready in the back room. The Planning Commission meetings could be held in the big room where the Board meetings are held currently and could be recorded and streamed/broadcast like the Board meetings are currently. Director George Catsavis asked about how much seating is in the back room. Dingman said that there is not quite as many seats as in the main room, but that it is “not vastly different.”

The issue of holding the four meetings in different ward will be up for a vote at a future meeting.