LITTLE ROCK — A budget increase of 5.3 percent for North Little Rock’s 2012 general fund would allow city employees to receive a 3 percent raise and provide $1 million for a new overpass on the city’s east side, according to the proposal heading to the City Council today.
The proposed $59.02 million budget won’t be voted on until public comment is held on the budget at the Dec. 27 council meeting. The council has also set a budget workshop, open to the public, for 7 p.m. Tuesday.
The City Council has until the end of January to approve the city’s budget, but it usually approves it by the second council meeting in December.
“I think it’s a good budget and is something we can live with,” city Finance Director Bob Sisson said Friday. “We attempted to allocate our resources the best we can. We always want more, though.
“The big change in the general fund are the raises and the million dollars for the overpass,” Sisson said.
The city is receiving additional revenue from a turnaround in the Pulaski County and city sales-tax collections, projected to grow by 2 percent next year. Also, the city stands to receive $1 million from the state to help pay for police and firefighter retirement benefits, Sisson said.
“This is the first year in along time we’ve had a really good year for the sales tax,” Sisson said, recalling a 20-month dry spell in city sales tax revenue in 2008-10.
The city will also carry over $738,000 from its reserve fund to meet projected expenses in 2013.
On the expenditures side, the city will put $1 million toward construction of an overpass at a railroad crossing near East McCain Boulevard and Fairfax Drive. The federal and state share of that cost is 80 percent.
“Just that $1 million is 1.8 percent of the general fund budget,” Sisson said. “That’s not quite all of the cost there will be to the city, but it won’t be until late next year that we need the money.”
Other increasing expenditures include the city portion of police and fire pensions - about $584,000 combined - plus $160,000 for police vehicles and equipment, an extra $200,000 for street and drainage work, and $1.1 million for emergency-services digital radio equipment.
Mayor Patrick Hays said the McCain Boulevard overpass will help open the eastern section of the city to economic growth, something that has been stalled by poor access and lengthy traffic delays related to the railroad crossing.
“That’s the key to ... future movement both for residential and commercial and maybe industrial growth for the city,” Hays said Friday. “I think it’s a crucial investment, a significant opportunity, and will bode well for the city in having that road and that overpass in place.”
Providing 3 percent raises for employees who have reached their maximum salary levels - and for full-time elected officials - will cost $739,000. The salary increases will be retroactive to June, adding $314,730 to this year’s budget.
City employees last received three, staged-in 1 percent raises during 2011, after getting bonuses in 2010. The last raise before that was 3 percent in 2008. Employees still due step-in-grade raises, who aren’t at their top salary levels, also receive raises of varying amounts. The step in-grade increases are separate from the 3 percent raise total.
“Our employees work hard,” Hays said. “ They’ve been good in trying to go through hard times, and I’m happy the economy has improved enough that our projections from a flat growth to a 2 percent increase in our sales tax and then the [state] pension allocation formula being adjusted gave us enough latitude to do so. I felt that in terms of priorities that’s what we ought to do.”
With a long-term contract secured just in the past two weeks between the North Little Rock Electric Department and neighboring Sherwood, a $470,000 turn back to Sherwood from electric ratepayer revenue is in the utility’s budget. Hays has included the payment the past three years, but last year, some aldermen balked at continuing the payment if the contract with Sherwood wasn’t in place.
Sherwood customers make up about 17 percent of ratepayers of the department’s 37,000 customers.
What isn’t in the budget again this year is any rate reduction for the utility’s ratepayers. The city reduced residential electric rates by 5 percent in 2010 and 2011 but gave no reduction in 2012. Six years ago, ratepayers were charged a 38 percent increase when the city’s wholesale power costs doubled.
Because of the utility moving into a new type of market that requires a significant cash flow readily available to purchase power at ever-changing market rates, Hays said, the utility couldn’t afford a rate decrease that would reduce its revenue.
“Because of the increased cash requirement of us going into this new market situation, they convinced me that it would be better not to do that at this time,” Hays said of lowering rates. “I was hopeful we would be able to do it as I left office.”
Hays’ sixth term as mayor ends Dec. 31.
Arkansas, Pages 9 on 12/10/2012