LITTLE ROCK — Little Rock City Hall expects to take out a $4.6 million loan before the end of the year to help buy new firetrucks, garbage trucks and street sweepers that city officials said are desperately needed.
The loan package would be the first short-term financing city directors have approved since 2008. The city hasn’t been able to afford to take on any new debt in recent years, and City Manager Bruce Moore said he’s only taking out the new debt because a 2006 loan for $6.5 million rolled off the books in April.
“This is an urgent list, something whether or not we were successful with the sales tax we would be bringing forward,” Moore said.
The loan, if approved, will be repaid with regular general fund revenue and not sales-tax proceeds, he said. It would pay for 13 large vehicles as well as a compost grinder and a storm-drain cleaning machine.
At the moment, the city has roughly $8.5 million in outstanding short-term debt. Since 2002, Little Rock has taken out more than $40 million in short-term loans to buy vehicles and build up seed money for new fire and police stations. State law requires that the loans be repaid within five years.
Moore said Tuesday that he plans to request a larger short-term note next year to help pay for capital items mentioned during the recent sales-tax campaign, such as the emergency communications system and firetrucks for a new fire station being built in west Little Rock.
City directors will consider the $4.6 million loan request next week in addition to more than a dozen financial adjustments needed to balance the 2011 budget.
Little Rock’s sales-tax collections haven’t met projections and Finance Director Sara Lenehan now expects collections to be short $1.3 million by the end of the year. Fines and fees also are expected to be down by $260,000 because fewer traffic tickets have been issued this year, Lenehan has said.
But those losses will be mostly offset by higher-thananticipated vacancy savings by keeping jobs unfilled throughout the year. The city has already surpassed its annual goal of $5.5 million in vacancy savings and Lenehan anticipates putting $1.6 million of that toward the budget adjustments.
“There was no net impact to the bottom line,” Lenehan said.
The adjustments also include some minor budgeting changes, such as reallocating on paper the diesel fuel allotment, for example. Others include making up for past shortages — $209,000 to cover the salary and benefits of the homeless-services coordinator and other expenses in 2010 and this year that were not budgeted, and contributing more into an old police pension plan.
The city expects to place $150,000 more into the police pension plan and $250,000 into the old fire pension plan to help qualify for a state match. Under Act 979, the two pensions stand to receive a combined $980,000 from the state.
Police pension funding has been a sore spot for retired officers who have said the city has consistently underfunded the old plan that older officers paid into decades ago. Pension board members were advocating their own sales-tax plan for a time that would have increased the contribution to the plan before members voted to support the city’s tax plan of a 1 percentage point increase for operations and capital improvements.
In 2009, the pension board called on city directors to make up for 14 years of missing state-required payments to the fund. The city hadn’t paid a portion of fines and forfeitures received through Little Rock criminal and environmental courts during those 14 years starting in 1995.
Little Rock did pay back the fund for the three-year time frame covered by the statute of limitations.
On Tuesday, Stodola said he hoped pension members saw the additional payment as the city better meeting its “moral obligation.”
The budget adjustments also call for the city to increase its non-uniform benefit contributions this year by $434,160.
Arkansas, Pages 10 on 11/09/2011