Fort Smith board approves new fee, bumps up another

FORT SMITH — City directors have approved two revenue sources that will generate about $1 million for Police Department needs.

City directors passed an ordinance by a 5-2 vote on Tuesday that established a $100 business license fee for all Fort Smith businesses but exempted businesses in their first year. Officials estimated the fee would generate $471,280 a year.

City directors had voted 4-3 on the ordinance at their Dec. 5 meeting. Because the ordinance didn’t get five votes in favor, it required three readings for passage.

Before the second reading, scheduled for Dec. 12, the city attorney’s office discovered that state law, Arkansas Code Annotated 26-77-102(a), required a two-thirds vote — or five of the seven-member board — to pass an ordinance requiring local businesses to pay a business license fee.

City Administrator Carl Geffken scheduled the board to revote on the ordinance Tuesday.

In addition to the four ward city directors who initially voted for the ordinance — Keith Lau, Andre Good, Mike Lorenz and George Catsavis — at-large City Director Tracy Pennartz cast the fifth vote in favor of the ordinance.

An ordinance to increase the city’s franchise fees also passed on a third reading. The ordinance increases the franchise fee from 4 percent to 4.25 percent for Southwestern Bell Telephone Co., Arkansas Oklahoma Gas Corp., Oklahoma Gas and Electric Co., and Arkansas Valley Electric Cooperative Corp.

The ordinance increases the franchise fee for “cable services” from 4 percent to 5 percent. City Finance Director Jennifer Walker said in an email Wednesday that the fee is charged to companies that provide cable and video services such as Cox Communications and AT&T U-verse.

The increased franchise fees are estimated to generate $554,000 a year.

City directors had intended the additional revenue to help pay for hiring 13 officers, estimated to cost $695,000, a memo from Walker said. Filling those positions had been put on hold last year because of a lack of money.

City directors also wanted money for Police Department equipment and training, estimated at $500,000, but they balked when the proposed ordinances came up for a vote.

Some feared the money would be absorbed into the general fund for other needs rather than for the police. An effort to earmark the money for police needs failed.

Other city directors opposed putting a greater financial burden on citizens and businesses.