LITTLE ROCK — Another electric-rate reduction and phased-in raises for city employees will be among high points of North Little Rock’s proposed budget for 2011, Mayor Patrick Hays said.
Hays said he will file the proposed budget by Tuesday for the City Council’s consideration in December.
Hays offered no specific numbers on the budget in an interview last week because all figures aren’t complete.
“Our goals are similar to what we did last year,” Hays said, referring to the city’s 2010 general-fund budget of $53.49 million that contained a 5 percent rate reduction for electric customers. “And we’re going to be very conservative in projections of our revenue.”
The general fund covers city services, including public safety and trash pickup, and employee salaries and benefits.
Hays said that keeping city services at current levels and rewarding city employees with a cost-of-living pay increase were foremost in his budget goals. Hays also hopes to reduce electric rates again while raising the amount of revenue transferred annually from the Electric Department to strengthen the general fund.
“If the numbers agree and with the council’s approval,my intent is to try to do that,” Hays said.
North Little Rock spent 19 consecutive months receiving less revenue from its 1 percent city sales tax, compared with the previous year’s corresponding months.
Revenue began to tick upward again in recent months.
Though still below 2006 revenue levels, Hays said that the bump is enough of a positive sign to be able to reward city employees who haven’t had a raise in more than two years.
Last week, the City Council approved bonuses ranging from $250 to $750 for all full-time employees as well as elected officials Hays, City Attorney Jason Carter and City Clerk Diane Whitbey.
“The city sales-tax revenue is, at least at this point, barely a half a percent higher,” city Finance Director Bob Sisson said. “I don’t know if we’ll predict any increase in the sales-tax revenue next year. The projection will be conservative and not particularly mean an increase in revenue.”
One-fourth of the city sales-tax revenue is dedicated to capital projects such as buildings and equipment.
Because higher costs four years ago drove up the city’s cost to buy power, its electric ratepayers were hit with a 38 percent increase starting in December 2006.
A less-expensive electric contract that began in April allowed North Little Rock to reduce the rates customers pay.
“The goal was to do at least the same thing we did last year,” Hays said of providing another rate decrease.
North Little Rock Electric Department has about 37,000customers, including 6,500 in Sherwood.
During its period of higher electric costs, the city also reduced its annual transfer of electric revenue into the general fund from $14.3 million to $5.3 million.
In this year’s budget, set a year ago, the city added $4.7 million to that transfer amount for a total of $10 million.
“In order to balance the budget, my intent is to ask the electric department for more help,” Hays said. “The [transfer] total will depend on how the final numbers pan out.”
Arkansas, Pages 7 on 11/29/2010