More than $80 million has been collected from the city taxes that voters approved two years ago, said the co-chairman of the citizen committee appointed to oversee the spending, adding that Little Rock residents should feel confident that the funds are being spent appropriately.
Co-chairman Gary Smith, along with 11 others, has been serving on the LRCENT Committee - Citizen Evaluation of New Tax - since its formation in early 2012. The Little Rock Board of Directors appointed the committee to ensure the city allocates the money collected from the five-eighth percent operating sales tax and the three-eighth percent capital sales tax that voters approved in 2011 as promised.
At its last meeting of 2013, the committee was shown an overview of what the revenue has purchased to date. Smith, who is resigning to serve on a different city board, said he’s pleased with the transparency that department heads - who presented the information at the meeting earlier this month - demonstrated in handling the funds.
“This new funding was essential for the city of Little Rock, and we’ve found that this revenue is being used appropriately, and residents should feel confident in that,” Smith said.
Almost $50.4 million of the revenue went into the city’s general fund for operating costs. The remaining $30.3 million was dedicated to capital improvements. With the help of short-term financing, $36.3 million has been spent as of November on capital projects, Finance Director Sara Lenehan said.
The principal payments on that financing will be paid back with revenue collected from the three-eighth percent tax.
Of the money collected, more than $20 million was spent on public safety, including radio system upgrades, construction of a 12th Street police station, construction of Fire Station No. 23 in west Little Rock and more than 100 new fire and police personnel.
“We’ve been able to almost immediately increase a lot of our hours available for assignment. Collectively, over the last couple of years, we not only hired about 90 additional officers but we retained 27 officers that were paid for on grant funding when the grants expired,” Police Chief Stuart Thomas said. “It puts more people on the street. … The more officers and vehicles you have out and available, then the chances are you are going to get to where things are happening a little quicker and you are not going to get stacked up so much.”
The radio upgrades for the Police Department were the largest public safety project, and officers should be fully converted to the new system in late January, Thomas said. The upgrade to a digital system replaces 1988 equipment that often wasn’t reliable, he said.
Committee Co-chairman Sybil Jordan Hampton said it’s been eye-opening to serve on the committee. It’s beneficial for citizens to be involved in city government when it comes to the spending of their tax dollars, she said.
“As a citizen, you often vote for things at the polls like increases in taxes and you feel like everything then goes into a black box and you don’t have a sense of what’s unfolding,” Hampton said. “I think it’s important for the citizens, as they drive around the town, to look for the signage that says, ‘This is a LRCENT project.’”
The city’s Public Works Department used a portion of the funds to complete 39 infrastructure projects across all seven wards and resurface more than 18 miles of streets in 2012. More than $18.2 million is to be spent on more infrastructure projects throughout 2015.
Tax revenue also funded improvements to Barton Coliseum, construction of The Centre at University Park, four soccer fields and an entrance to Natural Steps Park and improvements at the Little Rock Zoo, and it will fund the $6 million construction of the West Central Community Center.
More than $4.3 million was spent to replace or purchase 146 vehicles across city departments. And the revenue also funded technology upgrades.
“It’s a 10-year process,” Smith said. “Each and every year the city is allocating the dollars on a pro rata share to every item that was listed on the capital expenditure project list. As it relates to the operating side, I feel very confident in the way the city has been spending the money. It has been front-end loaded for fire and safety, which everybody understood on the front end.”
One concern of committee members is that over the 10-year period the tax revenue will fall short of estimates. There was a projected growth of 2 percent each year, but that didn’t occur this year or last year.
There’s still time for the growth to average out over the 10-year period, but if it doesn’t, Smith worries about the impact that would have on the daily operations of the city.
“I think the city manager and the city finance director have tried to allow for that and are looking ahead to ensure that all of the projects can be done, but I’m more concerned on the operating side. … If we don’t get that average 2 percent growth over the 10-year period, then I think it can begin to hamper the operating side.”
Lenehan said no matter the amount brought in from the taxes, the city creates its budget on a yearly basis and will balance that budget with whatever amount of funds are projected for that year.
“If we have to make adjustments, we make adjustments each year as we are going. We end on a balanced budget,” she said.
The capital projects are being adjusted based on the amount of revenue brought in from the three-eighth percent tax. and the city is also ensuring that there is enough money to operate the projects before issuing the funds to complete them, Lenehan said.
The three-eighth percent tax only affects “the speed of which we accomplish the projects. We are not going to have all the projects in the first five years because money is coming in over 10 years. We are just adjusting the timing of those,” she said.
Arkansas, Pages 11 on 12/26/2013