Two words resurfaced again and again throughout a budget meeting at Little Rock's City Hall on Tuesday: tough choices.
That's what the city's leadership is facing, Mayor Frank Scott Jr. said when he convened the Board of Directors to discuss reducing the city's personnel budget and allocating funds for public safety initiatives.
Scott said the city needs to plan for its long-term future and have its budget reflect its priorities. He plans to introduce "sometime between now and June" an amendment to the $210.6 million budget that was passed for 2019 before he took office, he said.
"Many times when we're running for offices, it is expected that we use terms like fiscal responsibility and conservative budgeting because that's what people think they want to hear," he said. "However, it's funny though, because when you get elected all anybody wants to talk about is making sure their program is not only fully funded but growing, and truth be told, that's the reason that most of us, all of us, get into public service in the first place. ... There's just one problem: current funding doesn't cover the things that are already in the budget today."
City revenue has been declining for years amid stagnant job growth, and the city has relied on one-time funding to prop up some areas of the budget, but that's not a sustainable solution, the mayor said. In 2018, the city experienced a net loss of about $7 million, finance director Sara Lenehan said in a presentation to the board. And if there's no change to the adopted 2019 budget, the city's general fund balance for audit and bond rating purposes will decline 22.7 percent, she said, from $40,594,519 to $31,360,636.
Funding also must be "identified or reallocated" for the mayor's "safe city" initiatives, Lenehan said. Scott wants to add 100 police officers to the Little Rock force over the next five years. The estimated cost to add 20 officers in the first year is about $1.6 million, which doesn't include costs for vehicles and other equipment.
The city earlier this month also issued a request for proposals from vendors for body-worn cameras for its police officers, a move Scott pledged in his state of the city speech, but one the department has forgone because of the cost. Lenehan did not provide a cost estimate for the cameras -- she said it depends on the number of cameras purchased, and because of the costs of maintenance and data storage, the devices would be an ongoing expense that would need to be built into the operating budget. Assistant Little Rock Police Chief Alice Fulk told the Arkansas Democrat-Gazette earlier this month that outfitting the department could cost at least $1 million.
Arkansas' capital city will face additional challenges in the coming years, Lenehan said, including an increase in the cost of its contract with the Pulaski County jail that could add $2 million to the annual budget, a new fire station opening on Stagecoach Road and about $918,000 to be set aside per court order for two civil suits the city is involved in that are on appeal.
The mayor is exploring three measures to identify potential cost savings in city spending, Lenehan said. He's requested preparation of a request for qualifications for an independent performance audit, directed departmental directors to look at their budgets, and is reviewing the possibility of a pilot run with a vendor that helps cities and receives a percentage of the cost savings it identifies.
"We have to strongly consider, to right-size our governmental expenditures and realign our resources and rethink what are our true priorities, to move forward toward a long future for our city, to maintain community trust," Scott said after Lenehan's half-hour presentation.
Ward 1 City Director Erma Hendrix said she agreed with the mayor that "some changes will have to be made." Other city board members had questions for Scott and Lenehan.
"Here's the elephant in the room: We have lived with reducing things, but we're now down to human capital and the euphemism 'to get our house in order' is we're going to let people off," At-large City Director Dean Kumpuris said. "So now I want to ask you the hard question: How many people are we going to let off and who are we going to let go in this situation?"
He pushed for Scott to take options back to the board for input, and he asked if city leaders were planning to pay back 2018's $7 million loss this year. Scott said that hadn't been decided yet and that he'd provide at least three options on how to "right-size" city government.
"To answer your question as it relates to human capital, I'll just, I'll be very frank. We have -- 75 percent of our general fund budget is personnel. We need to curb it back and right-size government and take steps and phases, and we don't know that journey yet, but a more manageable personnel cost should be around 65 percent," Scott said.
Ward 2 City Director Ken Richardson said the 75 percent of the budget going toward personnel troubled him. When asked by Ward 5 City Director Lance Hines about the 65 percent number, Scott said it wasn't a target but a figure to work toward based on his experience as a bank executive.
Hines, as well as Richardson, questioned Scott's proposed addition of officers to the police force. Richardson said he felt Scott had the right priorities about public safety but that the city needed to be "a little bit more creative" in its policing.
"Those parts of our city where they see 'patrol and control,' they don't want to see more police," Richardson said.
Hines said he didn't think the city had gotten a chance yet to see how much a fully staffed police force could reduce crime, with the department having recently filled its vacancies, adding that the city should look at what it had before adding more officers.
"If we're really serious about this, there can't be any ... sacred cows," Hines said.
Metro on 04/17/2019