Kellams: It’s Friday, and that’s good news. Also good news, Michael Tilley from Talk Business and Politics with us. Michael, I always enjoy Friday. How about you?
Tilley: I enjoy it. I’m glad you think it’s good news. Outside of family, sometimes that’s not always the response I get, so I’ll take it.
Kellams: Well, let’s talk. There’s so much to talk about, including budgets and things like that. But where are we going to start this week?
Tilley: Well, I guess budgets. Yes. The drama of the Fort Smith budget. And I mean, we’re not talking a few dollars here. This is between a general fund and then operating budgets. It’s hundreds of millions. But look, I’m buying some popcorn for this one because it’s going to be this budget discussion between these directors. It’s going to be part mystery, part drama, part heated reality show, part Stephen King, part 10-car pileup on the road that you just can’t look away from.
But look, here are the basics. And this is really a superficial summary. Let’s just take the general fund, the city’s general fund, which is probably one that gets the most attention because administrative services, police, fire budgets come out of that, fire department budgets. And the whole goal here is to try to end—they’ve been on a deficit spending run with the general fund budget, which it’s not as bad as it looks, because there are other ways to do it, but we don’t have time for that.
But in 2024, the general fund budget posted a $6.4 million deficit. It’s projected with about a $15, $15.5 million deficit this year. The 2026 proposed budget has about an $8.1 million deficit, and there are board members that just aren’t cool with that, and rightfully so. They’re interested in getting it balanced or even having a surplus, because the fund balance for the general fund has gone from $34.4 million at the end of 2024, and it’s projected to be down to just under $12 million at the end of 2026. So that’s been a pretty big hit on the fund balance.
So some of the initial—this is from a draft budget—the Fort Smith board is supposed to have its budget hearings in mid-November. I think Nov. 14 is the first date. And so, for example, the proposed 2026 budget, it has a $769,000 reduction in the police budget, proposed $871,000 reduction in management services, and then an $8.3 million reduction in what’s called non-departmental expenditures. That includes areas like providing funds to senior citizens centers, Area Agency on Aging, Fort Smith Convention Center, the much-maligned water park.
So those are going to be some areas that they have. And the challenge, Andrew “Andy” Richards spoke to the board this week, and he was pretty blunt in his assessment. Director Christina said, “What’s your confidence that we can balance it?” And he quickly said, “Yeah, it’s not very high.” And it was just kind of crickets after that.
But he explained the issue is, you know, you can cut as much as you want. But he said we’re seeing, not only the city of Fort Smith, but many businesses, private and public sector organizations, are seeing a rising cost of health insurance, for example, rising costs of materials. I don’t think there’s any area of goods and services that the city buys that has not been hit by inflation significantly.
But Andy Richards essentially said, his quote was that you have some really hard choices. And his quote was, “I’m afraid it’s going to impact our level of service across the board.”
So the city is in a pickle. You know, a city can’t just sell new stuff. They can’t sell more stuff or seek out private investors to raise money. And what’s going to be interesting, Kyle, and I’ll shut up with this, is you have seven directors with often 20 different perspectives. Some want government to be run like a business, but then they won’t support raising costs to cover the real cost of providing a service. Or, you know, in one meeting they’ll tell a department head to make big budget cuts, and at the next meeting, they’ll grill that same department head about why they haven’t done such and such yet.
So this is going to be interesting, watching all of these personalities on the board. You’ve got, I think, a few that are wanting to run for mayor. Mayor George McGill, I don’t think, is running for re-election. So, yeah. If you want to come join me, bring your own popcorn, because I’m not sharing.
Kellams: Ooh, that’s going to be—I don’t envy people who have to figure that out.
Tilley: No, I don’t. I am having a little bit of fun with it, but I don’t want to make too much light of it. It is a serious issue, and these directors certainly have a challenge in front of them.
Kellams: Thirty-eight people have applied to be the city administrator of Fort Smith, so maybe they would have a handle on what to do in the future when it comes to budgets.
Tilley: Yeah. I wonder how much lower that number would be if they really knew what the budget cycle was going to look like.
Well, they’ve had 38 between Sept. 2 and Oct. 6. That was our Freedom of Information Act request dates. I think the application goes through today. Maybe it was yesterday, but it’s somewhere in mid-October as the initial deadline, they said, although they can move that if they want.
But out of those 38, Kyle, my review showed only seven that had any kind of government, any kind of municipal experience. Jeff Dingman, who’s the acting city administrator in Fort Smith, he’s one of them. But they had a city manager from a city with about 14,000, the mayor of Clarksville, David Reeder — that’s a town of 10,000 — one gentleman, Scott Rigby, he’s the former city manager of Edmond, Oklahoma. They have around a population of 100,000.
But this is going to be interesting. The board didn’t want to hire a search firm. They wanted to just open it up and get applications. So this is kind of from the, you know, sometimes-you-get-what-you-pay-for department. They wanted to save money, but this is the most important hiring decision they’ll make.
And I thought it was interesting that, you know, we’ve talked before about that botched process to hire the internal auditor. They didn’t use a search firm for that. I was somewhat surprised that they didn’t say, “Hey, you know, that kind of got screwed up. Maybe we want to hire a search firm to make sure that we get good candidates and that they’re fully vetted.” But the board’s going to do it on their own. So we’ll see what other candidates they get in and see if they decide to change directions. It’s been over 10 months since they fired the former city administrator. So ticktock.
Kellams: Whoever the next city administrator is, there’s a chance they might go to Washington, D.C., to lobby on behalf of the city of Fort Smith. Or maybe not. I mean, it takes money to lobby.
Tilley: This has been an interesting one. There’s been a lot of social media fury about the city of Fort Smith — seven members of the city going to D.C. recently. It cost a little over $15,000 for the trip. And we wanted to remind our readers that the city also pays for lobbying firms to look out for their key interests, and that’s roughly $150,000 a year they spend with a group called the Roosevelt Group.
They’ve had a few other groups, but they cut back to just using the Roosevelt Group. And this is not uncommon for cities the size of Fort Smith. I guess I’ve just been surprised by folks who believe we should have no lobbying efforts in D.C. other than just going through a congressional delegation. Right or wrong, Kyle, I think a lot of folks would tell you that a city’s best way to have a seat anywhere near the table is to have at least one lobbying firm looking out for your best interest in Congress, even when it’s shut down.
Maybe that’s the media’s fault. Maybe that’s our fault, and I’m sincere about that. Maybe we haven’t done enough reporting that explains how that process functions and why you want to have somebody looking out for your best interest. But that’s been an interesting story.
Kellams: Finally, it’s been about 13 years since Whirlpool left Fort Smith, but unfortunately, there is still a legacy.
Tilley: Yeah, a potentially deadly legacy. This has also been interesting to watch. We got all worked up about these cancer-causing chemicals in the ground when Whirlpool abandoned that Fort Smith plant. That interest has kind of waned. But what has not waned is the level of cancer-causing chemicals that are still in the ground.
We’ve been watching this. Whirlpool hired this company, Ramboll — an engineering firm — to do their testing. They have these testing wells, extraction wells, injection wells all around this 150-acre site, measuring plumes north, south, east, west — plumes of these cancer-causing chemicals, primarily one called TCE.
They submitted a report earlier this year. The Arkansas Department Environmental Quality came back and said, “Hey, we’ve got some problems with some of these parts,” and asked Ramboll to come back. ADEQ made some demands: “We need more testing in this area. We need more information in this area.” Ramboll responded favorably to most of that, but there were a couple where they pushed back.
In fact, there was one area that ADEQ requested more monitoring wells, and Ramboll said, “We’re going to get some more information about the plume flow in that area before we agree to more monitoring wells.”
That was a Sept. 12 letter. ADEQ, which has proven very difficult to get info from — I mean, you have to send them a Freedom of Information Act request. I think if you asked them what day it was, it’d have to be an FOI request. They have responded to my question if there’s been a response to the letter. They said they have not responded back. So I have to trust them on that.
But I guess the bottom line, Kyle, is that there are still dangerous chemicals in and around that plant. And we just have to trust right now that ADEQ is holding Whirlpool and its engineering firm, holding their feet to the fire, making sure those chemicals are being remediated, mitigated as much as possible, and that they’re being monitored as well as they can be.
Kellams: And of course, we’ll keep our eyes on that. You can keep your eyes on all of these stories and many more at TalkBusiness.net. Michael Tilley, thank you for your time.
Tilley: You’re welcome, sir.
