FAYETTEVILLE -- The city will turn toward economic vitality as officials finalize the budget for the coming year.
Chief Financial Officer Paul Becker outlined the mayor's 2017 budget to aldermen at a discussion Saturday morning at City Hall.
What’s new?
The city has proposed a $155 million budget for 2017. That’s up about 5 percent from last year’s $147 million budget. The most significant increases to the general fund include:
• Economic development program: $470,000
• New personnel: $339,239
• Motorpool: $193,910
• Contract services: $178,412
• LOPFI pension: $171,323
• Personnel: $135,982
• Outside agencies: $103,682
• Software maintenance/lease: $84,377
• Regional Park: $63,136
• Travel and training: $44,274
• Fuel: $34,680
• Office machine maintenance: $30,111
• Uniforms/personal equipment/bunker gear: $20,434
• Utilities: $19,377
• Health insurance: $18,814
• Minor equipment: $18,424
• Telephone: $13,412
• Insurances (vehicles/building/personal): $5,293
• Other: $11,643
• Total: $1,957,223
The city also has proposed $161,223 in cuts from professional services, vehicle transfers to shop, election costs and lease expenses.
Source: City of Fayetteville
The budget increased about 5 percent, from $147 million in 2016 to $155 million for 2017. The extra $8 million or so largely is attributed to a new economic development program, raises to city employees from last year, new hires, increasing insurance costs and pension increases, Becker said.
Becker described the city's economy for the past year as robust. He expected city and county sales tax revenue to increase about 4 percent by year's end. He also conservatively estimated sales tax revenue to go up 2 percent in 2017.
"I've been accused of being conservative before. Well, there's a reason I'm conservative," Becker said. "The ramifications associated with being wrong on the low side are much more than being on the high side."
About 38 percent of the city's revenue comes from sales tax. The proposed budget shows nearly $60 million in sales tax revenue for 2017. Water and sewer service revenue accounts for about $36 million in revenue, or nearly 24 percent. The city brought in about $17 million for water, sewer and trash service charges, making up about 12 percent of 2017 revenue.
Aside from sales tax revenue going up, the city's hotel, motel and restaurant tax revenue is up about 7 percent. Building permits should bring in about $1 million. Water and sewer fees likely will go up 3 percent in 2017. The city expects other sources of revenue to remain stable.
The largest spending for 2017 will go toward personnel, about $51 million, or 33 percent. Nearly $24 million in debt service will take up the next biggest chunk.
The city's debt, which was at $144 million when Mayor Lioneld Jordan took office in 2009, is down to about $92 million and could be paid off by late 2019.
The city's $470,700 commitment to economic development marks the biggest addition this year. The general fund budget allots $106,000 to a new economic vitality director.
The City Council in November 2015 approved a contract with Boyette Strategic Advisors and adopted its economic program in May. The economic program money would go to a local contractor, Startup Junkie, to instigate entrepreneurship and to the Chamber of Commerce for business retention and to promote retail, among other endeavors.
Once the City Council approves creation of the economic vitality director position, an internal committee of mayoral appointees would screen candidates. That person would be in charge of overseeing the program.
Cities of comparable size invest somewhere between $700,000 to $900,000 toward economic development, Jordan said. Previously, the city invested about $160,000 to that end, he said.
"I believed we needed to up it if we're going to be competitive nationally -- not only in the state and not only in the region," Jordan said.
Alderwoman Adella Gray suggested having more take-home vehicles for police officers. The 2017 budget allots for one such vehicle at $60,000.
"I just feel very strongly. Our policemen -- our force is down. We need recruiting power," she said. "This is a huge recruiting thing."
Aldermen also suggested funneling more money into traffic and sidewalks, an issue constituents frequently bring up. Alderman Matthew Petty said the city can explore methods to keep costs down for those infrastructure items.
The council will review the budget and present any amendments at its Dec. 3 meeting.
Jordan and Becker expressed concern over a recent proposal from the Washington County Quorum Court to strip millions of dollars from cities in the county and put the money into the county's coffers.
Fayetteville gets $1.1 million from the county. That money accounts for about 17 percent of the $6.8 million dedicated to repair and maintain the city's streets. Quorum Court members tabled the issue Thursday, but if the measure passes, it would cause the city to seriously rethink its budget.
"If I've got to cover $1.1 million, we'll have to figure it out pretty quick," Jordan said.
The city looks to create about nine new positions, including two full-time police officers. It hired seven police officers, 11 firefighters and a dispatcher last year per requests from the police and fire chiefs, Jordan said.
"Those people have been hired," he said. "That's the bottom line."
NW News on 11/20/2016