Nicky Boyette – Eureka Springs city council gathered at 4:30 Monday to continue reviewing the proposed 2017 budget for the city, and found it tight, lean, and sparse in between. Mayor Butch Berry told aldermen he had not included the $4000 for the cemetery alderman Bob Thomas had requested, for example, nor did he include funds to further refurbish the downtown fire station.
Berry said the 2016 budget had included $38,000 for one new replacement vehicle for the police department, but Police Chief Thomas Achord had instead used the funds for two used vehicles he found in Missouri, and as Achord was pleased with the results he might do the same thing again in 2017. In fact, Berry said all department heads have done well controlling spending and making do since he imposed a spending freeze last spring.
Aldermen were unsure why the fire department was on pace to acquire 40 new self-contained breathing apparatuses over a four-year period. Ten units were paid for by a grant earlier this year and ten more at a cost of $80,000 were in the 2017 budget. Alderman David Mitchell asked that Fire Chief Nick Samac come to the next budget workshop and explain the request.
“I can’t imagine needing forty,” commented alderman Terry McClung, a former firefighter. He said there are only six to eight firefighters at the station at a time, and maybe six to ten more show up when there’s a fire, but some are at the trucks and some in command. “Not everyone enters the structure,” he noted. “He [Samac] needs to convince us.”
There were also concerns regarding the consequences to ESFD if the city loses its ambulance contract with the Western Carroll County Ambulance District next year. Berry said there will be other bids for the contract, and pointed out the department would lose EMTs and firefighters if it did not get the bid for the contract, which will be awarded midyear.
Berry also mentioned that he and Finance Director Lonnie Clark have discussed diverting money already earmarked for a new Public Works building to either a testing facility or chemical storage facility at the Sewer Treatment Plant. Berry said the cost of the Public Works facility keeps climbing and the investment at the sewer plant would create continual cost savings for the city.
Alderman Kristi Kendrick asked if there were a way to use the money the Hospital Commission has in its accounts. Alderman Mickey Schneider responded, “I’ll tar and feather you if you take health care money away from the citizenry.” There was discussion regarding the legalities that limit what the Hospital Commission can do with its funds, and Clark mentioned the state legislature will be starting a new session soon, and someone with the appropriate knowledge, such as Kendrick, could try to get the law changed.
“I don’t like money sitting there which will never be used,” Kendrick declared, but Berry pointed out the Hospital Commission funds would be no more than a momentary fix and then they would be gone.
Aldermen then delved into inner machinery of the budget, perceived peculiarities of individual line items, and why some revenue projections were so low. Berry and Clark dutifully tried to answer the inquiries. At one point, Mitchell commented, “This is rough, and if we lose the ambulance contract, there goes $140,000!”
Berry added another couple issues. He reminded council the Parks one-eighth cent tax sunsets next year, but he is confident Parks will mount a campaign to renew the tax which is dedicated to support Parks Master Plan projects at Lake Leatherwood City Park.
Also, Berry mentioned there is still the issue of meeting the bond covenant, which stipulates that net city revenue from water and sewer should equal 120 percent of the bond payment plus an additional three percent for depreciation. He said the city has never been behind in making bond payments, but it has not been meeting the 120 percent requirement. He said the recently defeated one percent tax would have forestalled raising water and sewer rates, but citizens chose to vote it down. Therefore, raising water and sewer rates is now on the table because the city must meet the 120 percent requirement although these increases will do nothing to improve the city’s infrastructure.
“We need more than the 120 percent to get anywhere,” McClung commented.
Clark said he has been studying four different strategies for the rate increase: 1) raising rates to cover the 120 percent; 2) raising rates plus paying down the principal on the bond; raising rates plus paying down the principal, and paying back over time what the city took from the general fund to cover deficits at the sewer plant; 4) raising rates plus paying down the principal, plus paying back the general fund, plus adding what the one percent tax would have generated.
“It’s a work in progress,” Clark stated.
“You can kick the can down the road only so far,” Mitchell remarked implying it was time for the city to get out of its predicament.
Kendrick asked how quickly the city could begin recouping new funds, and aldermen said a rate increase would take effect as soon as it is passed.
Berry said the city will have to raise water and sewer rates, but since it will put a burden on citizens and businesses, he said the challenge is how much to raise it.
McClung was quick to respond. “Why go for anything less than what will do you some good? We gave them an option. It was a great idea. It [would have] disbursed the burden to everyone.” He asked why would they raise rates unless they intended to solve the problem.
The group agreed they needed the numbers Clark is working on.
McClung also contended they should give a tax another chance. “I can’t help but think but we can get a three-quarter cent tax passed.” Other aldermen agreed with the concept and tossed around what amount would be palatable to the voters, but there was no disagreement that increases in water and sewer rates loomed on the horizon.