NORTH LITTLE ROCK -- Officials got their first look this week at how covid-19 will affect the city's proposed budget for next year, which will include a steep decline in revenue for the Parks Department.
City Finance Director Ember Strange presented the City Council with the first draft of the proposed budget, which outlined expenditures from 2020 and the proposed budget and expenditures for 2021.
Revenue for the city's general fund is expected to increase from $72,061,425 in 2020 to $74,236,435 in 2021. Expenditures for 2021 also are expected to increase, from $72,059,178 in 2020 to $74,236,435.
"Sales tax and property tax have been projected as flat due to the uncertainty with covid," Strange said Tuesday. "We also have a slight decrease in licenses and permits fees, franchise fees, charges for services and fines, and fees also due to the covid."
To make up for the losses, the proposed budget calls for the city to use $2 million in carry-forward funds to ensure a balanced budget, which is required by the state.
"The carry forward from 2020 was $625,000, and for 2021 we are increasing that to $2 million," Strange said. "We received $2.4 million from the Coronavirus Relief grant, and we are going to use some of those funds to balance the 2021 budget instead of having to cut expenditures."
Strange said the increase in carry-forward funding will be used in hopes that revenue sources that have been cut or conservatively budgeted, such as the sales tax, will return to normal in 2022.
"We might not even have to touch the carry-forward funding, but we are required by state law to have a balanced budget," she said. "We haven't touched the $625,000 from this year, and we aren't anticipating having to use it due to departments managing their budget and watching their spending, and sales tax not being down as much as we expected."
The Parks Department has been one of the hardest-hit departments during the pandemic, and the 2021 budget factors in some losses in revenue.
Strange said Parks Department funding factors in the food and services tax, the lodging tax, the food service tax and the Advertising and Promotions food service tax. Normally, she said, the Parks Department receives 70% of the Advertising and Promotions tax and the North Little Rock Advertising and Promotion Commission receives 30%, but the pandemic forced a change.
"Since [the Advertising and Promotion Commission] has been hit so hard from covid, they met with us and requested 50% of the tax instead of 30%," Strange said. "This lowered the projections for what Parks would receive by $385,000, but on top of that the rest of the tax money from lodging and food services is projected to come in lower.
"In total, the Parks fund will see a loss of $895,000."
Strange said that to offset some of those losses, the city plans to transfer $430,000 from the general fund to the Parks fund. The Parks Department also is cutting all part-time salaries by 15%, and operating expenses have been cut by 10%.
"I sat with the interim parks director, and we went through every single line to see if he can stay within budget after those cuts," Strange said.
The Parks Department was the department most affected by covid-19, she noted.
"It's not any fault of their own. It's just the nature of the Parks Department," Strange said. "They are here for the citizens, but they are going to have some trouble standing on their own [in 2021]."
Strange pointed out that golf course funding has increased for next year because golf courses have seen an uptick in business during the pandemic.
"The golf course has done really well since covid, but that is just one small piece," she said.
Council Member Linda Robinson suggested that the city eliminate its chief of staff position to provide funds for two new code enforcement officers.
"Both [mayoral] candidates have said they can be up and running by Day One," Robinson said. "There is a need for code enforcement officers now."
Mayor Joe Smith said eliminating the chief of staff position would be a disservice to the new mayor, who would need assistance in an unprecedented year because of the ongoing pandemic.
"The brand new mayor will need all the help that he can get," Smith said. "I promise you neither candidate will be ready for Day One."
Elimination of the chief of staff position -- which would have provided $150,000 for two new code enforcement officers -- was voted down.
Strange said the Finance Department will need to examine the numbers to see if there is another way to provide additional help for the Code Enforcement Department.