“Hard choices” will be required to balance the city of Fort Smith’s general fund budget, which has posted a deficit in recent years. That was the message Tuesday (Oct. 14) to the Fort Smith Board of Directors from the city’s chief financial officer.
During a brief presentation of the city’s proposed 2026 operating budget, Director Christina Catsavis asked Chief Financial Officer Andy Richards about his confidence in the city having a balanced operating budget in 2026.
“My level of confidence? Not very high,” he responded.
The city’s general fund budget has received the most scrutiny in recent years. The budget is closely watched because it includes funding for police, fire, development, city management and other key services.
In 2024, the general fund budget posted a $6.47 million deficit, and is projected to end 2025 with a $15.56 million deficit. The proposed 2026 budget as presented to the board Tuesday projects an $8.092 million deficit. The proposed 2026 budget anticipates $53.695 million in revenue and $61.788 million in expenditures. Of the expenditures, $20.589 million is for the Fort Smith Police Department, and $16.227 million is tied to the Fort Smith Fire Department.
The proposed 2026 budget shows a $3.658 million decline in estimated revenue, and an $11.126 million decline in expenditures.
Richards told the board that department heads have made progress to “shave” the budget, but the rising cost of health insurance and other inflationary pressures “have made it very difficult for our revenue to cover our expenditures.”
The proposed 2026 police budget is $769,357 lower than 2025, and the proposed management services budget is $871,091 less than what is expected to be spent in 2025. Also, the non-departmental line item in the proposed city general fund is projected to be cut by $8.323 million in 2026 compared with 2025. Non-departmental expenditures include support of area organizations like the senior citizens center and the Area Agency on Aging, and facilities like the Fort Smith Convention Center and Parrot Island Waterpark.
“I think you’ll see there has been progress made in that direction (balancing the budget),” Richards said. “But on the flip side, we’ve had to consider the cost of our health insurance, the cost to the city. We’ve had to revise that estimate upward, so that’s another issue. So my confidence level indicates that in order to get a balanced budget for ’26, I think some really hard choices are going to have to be made. I’m afraid it’s going to impact our level of service across the board.”
Director Neal Martin said it will be up to the board to move beyond what is proposed in the push for a balanced budget. Martin challenged other board members to consider not just a balanced budget, but a budget with a surplus that can add to the end-of-year fund balance for the general fund.
The fund balance was $34.472 million at the end of 2024 and is projected to be $11.818 million at the end of 2026.
Link here[1] for a PDF of the proposed 2026 budget.