Fort Smith finance staff preview 2026 operating budget, warn balancing will require hard choices

Chief Financial Officer Andy Richards presented the City of Fort Smith’s proposed 2026 operating budget at the Board of Directors’ Oct. 14 meeting as a presentation-only item; no board action was requested.

Richards told the board the bound “main book” contains summarized budget information for four operating funds and that detailed line-item backup is available in a larger binder. He said, unusually for this year, capital outlay requests for the operating funds were included in the same budget document rather than added after the operating budget was adopted, and that staff will distribute supplementary information clarifying how capital affects the operating results.

The presentation prompted questions about whether the preliminary budget can be balanced. "My level of confidence, not very high," Richards said when asked by Director Christina Savage how confident he was that staff could deliver a balanced 2026 budget.

Mr. Deane (staff member) and City Administrator Dingman told the board departments had been asked to identify reductions and that staff plans to return with recommendations ahead of the Board’s Nov. 14 general session. Dingman said departments have worked to “shave the budget” but rising costs — notably health insurance and inflationary pressures — mean “some really hard choices are gonna have to be made” to get revenues and expenditures to match.

Board members asked about vacancy assumptions used in the draft. Director Settle noted the draft assumes every position is filled for the full year; Richards confirmed the budget currently assumes positions are filled 100 percent of the year. Richards said recent vacancy calculations total about $3,800,000 citywide; he said the general fund portion of that figure is roughly $440,000 (figures presented by staff during the meeting). Board members asked staff to return with an alternative budget projection that applies a realistic vacancy rate (for example, the typical 8–10 percent vacancy) so members can see the savings impact before making cuts.

No formal action was taken. Staff set a target of Nov. 14 for the next budget review session and said they will provide the capital item list and a reformatted workbook to the Board in the interim.

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Staff will provide supplemental capital breakout information and vacancy-rate scenarios ahead of the Nov. 14 budget review; no votes or ordinance readings were required at the Oct. 14 meeting.