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Fort Smith board debates 15% cuts proposal, sets extra study sessions for budget review
Summary
Board members spent a multi-hour study session weighing a proposed uniform reduction to Water and Sewer allocations to free money for consent-decree work, with discussion shifting to priority-based budgeting. The board agreed to schedule additional study sessions and directed staff to return more detailed options.
Director Jared Rigo opened the Fort Smith Board of Directors study session Tuesday night by presenting a cuts proposal that would place a uniform reduction on 13 departments that receive support from the Water and Sewer Fund in order to free money for consent-decree work.
Rigo said the staff-level proposal was not intended as an “alternative budget” but as a conversation starter. "I want to apologize to any department head or city employee who feels nervous, troubled, or even perhaps angry about the contents of this proposal," Rigo said in his prepared remarks. He said a 15% permanent reduction across the 13 departments could generate “over $2,800,000 additional per year for consent decree work,” and that combining that sum with one-time spending reductions in the CUTS proposal could free about $1,100,000 more this year.
Why it matters: The board is confronting an adopted 2025 budget that staff say budgets a structural deficit and draws down reserves; members expressed interest in both near-term cuts and a longer-term shift to priority-based or zero-based budgeting to align spending with the board’s policy priorities.
Board debate focused on tradeoffs. Director Christine Kitsapas said flat percentage cuts can disproportionately affect departments with high personnel costs, using Engineering as an example: "Their total budget is $1,873,000 with labor and benefits accounting for $1,792,000… their variable expenses are only $80,000." Kitsapas urged a line-item, priority-based approach and proposed quarterly budget reviews and a formal Fort Smith travel policy to rein in conference and travel spending. Director King asked whether departments should be asked to find the cuts themselves or be assigned a percentage; Kitsapas and others favored having department heads present targeted options.
City staff and finance. City staff and the finance office characterized three separate but related discussions: (1) immediate reallocation of dollars to the consent-decree program, (2) concerns about general-fund balance and reserve policy, and (3) potential structural changes to the budgeting process. Andy (chief financial officer) summarized the historical approach to budgeting, noted that the adopted 2025 general-fund budget included a projected deficit (he cited a $5.7 million deficit for the general fund in the adopted 2025 budget), and said departments had been asked to identify short- and long-term reductions. He told the board that some travel and discretionary items had already been targeted in staff’s preliminary short-term reductions.
Next steps and scheduling. Directors pressed for an actionable pathway: several members called for a dedicated day to set board priorities and to work with department heads on specific reduction scenarios. After discussion the board agreed to reserve extended study-session time in April: the board scheduled two extended study sessions on April 22 and April 29, 6:00–9:30 p.m., to begin a concentrated budget review. Board members also agreed to allocate additional study time in the coming weeks to deliberate priorities and to ask administration and department heads to return with concrete options for targeted and structural reductions.
What was not decided. The board did not adopt the 15% uniform reduction as a formal policy or vote on specific personnel or program cuts. Several members explicitly said they wanted administration and department heads to return with analyses of operational impacts before any directive to adopt cuts or to backfill reductions from the general fund.
Board context. Directors emphasized competing goals: protect core services and staff retention, maintain reserve policies, and accelerate consent-decree work that depends on additional operating funds. Board members proposed multiple governance changes — including regular quarterly budget reviews and a priorities-setting session — and asked staff to return with details on what each department could absorb and the effects on service levels.
Ending: The board directed staff to develop options and to return to the board at the scheduled April study sessions; members urged that the board set clear prioritization guidance before any permanent reallocation or staffing decisions were made.
