North Little Rock is one step closer to passing its proposed $76.8 million 2022 budget.
An optimistic budget with projections in increases in tax revenue shows signs the pandemic's fiscal hit on the city is over as the City Council mulled the city's fiscal future at Monday night's budget meeting.
Members of the City Council had several questions and a few added suggestions, but the budget's main top-line items will likely be the same when it goes before the council for a vote Dec. 13.
Buoyed by businesses that have rebounded during the pandemic and federal stimulus funds, Mayor Terry Hartwick has proposed a $2.4 million increase in expenditures from what the council passed last year.
Much of that increase will go toward 2.5% pay raises for non-uniform city staff members. The city is negotiating a contract with its firefighters and North Little Rock police had previously agreed to a two-year contract.
"We had a good year, so I'm proposing a 2.5% raise," Hartwick said.
About a year ago, while campaigning for mayor, Hartwick said his previous experience as mayor could guide the city through the pandemic. Sales-tax revenue was down as many avoided shopping and eating out when covid-19 cases were high and emergency rooms were full.
The budget projects a $4.6 million increase in sales-tax revenue and small increases in property tax, license and permitting, and franchise fee revenue. In total, the budget projects $76.8 million in revenue with the largest part, $53.7 million, coming from city and county sales taxes.
"This year has been easier," Finance Director Ember Strange said. "We've seen our sales-tax revenue rebound; our parks, hotel and restaurant tax rebound where last year there was so much uncertainty into what was going to happen."
But with coronavirus cases relatively low and vaccines available, the city's finances have rebounded as many have returned to shopping and eating out. Hartwick, in his first budget since being sworn in as mayor in January, is also pushing for increases to police and parks.
The North Little Rock Police Department, the largest part of the budget, will see about a $1 million increase in funding in the proposed 2022 budget totaling $26.4 million.
The budget calls for an $878,502 increase in the parks fund, bringing its total to $9.3 million with much of the new spending proposed for maintenance, special projects and the Arkansas Inland Maritime Museum.
Hartwick said he looked to 2019, not 2021, as a guide for budgeting, with expectations the city would mostly be past the pandemic.
The proposed salary increases come at a time when the city has a high number of open positions, with some workers leaving for higher pay elsewhere. Council Member Jane Ginn said she is worried the city's salaries aren't as competitive with Little Rock's, but Hartwick pushed back on concerns the city had trouble retaining staff.
"I haven't even looked at Little Rock," Hartwick said. "It's just the right thing to do."
There is also $500,000 in funding for upgrades at the newly acquired Blue Cross Blue Shield Building, which will become office space for approximately 150 city employees. The city purchased the building for $5 million in June.
But even with the increased revenue from an economic recovery and $16.8 million in federal pandemic stimulus money, North Little Rock is still reeling from homelessness and high crime rates.
Council members focused much of their attention Monday night on a myriad of items listed under special appropriations, such as an additional $30,000 for the airport that is meant to bring back the air show or additional funding for the homeless.
Council Member Debi Ross suggested finding a use for empty buildings in downtown.
Council Member Steve Baxter suggested adding more to the city's unfunded non-uniform pension fund, which Strange estimated would take roughly 20 years to pay back.
Baxter's suggestion to add an increase in contribution from the city and on the employees' end would reduce the payback estimate from about 20 years to 17.5 years, Strange said. An increase in the city's contribution to the pension would cost the city about $160,000 and would be of "minimal cost" for employees, Strange said.