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— The mayor and city council have been going line-by-line through the mayor’s draft budget for 2010 and cutting expenses where they can to come up with a budget which not only stays within projected incoming revenue, but allows a little room for the unexpected.

Mayor Wes Hogue and council members held work sessions last Wednesday and again on Monday to look for ways to pare back the city budget enough to keep from getting in trouble if the economy continues in its downward turn in 2010 and incoming tax revenues continue to decline.

The city’s goal has been to budget no more than 90 percent of projected incoming tax revenue, but that mark has been a hard one to meet because of declines in city and county sales and use taxes coming into the city. To budget more than 90 percent ofprojected income could get the city in trouble if incoming tax revenue falls off further or unforeseen major expenses arise during the year.

Though the mayor’s draft budget was conservative and did not include money for any major new projects in the upcoming year, the ending balance in the general fund was projected at only $142,110, just over $100,000 less than projected for year-end 2009.

The projected declining year-end balance moved the mayor to propose further cuts, including the removal of $35,000 from park improvements and a onetime cut of $40,000 from money being set aside to pay for future retirement of elected officials from the general fund (required by law).

Hogue announced Monday that the city had received word that it would not be receiving a matching trails grant for the park, freeing up $20,000 which the city had committed as matching funds should the grant application be approved.

The police department budget also saw major cuts with the line items for a new police car and equipment for a new car cut entirely, at a total budget savings of $30,500. Radar equipment was also cut from $2,000 to $200, and vehicle maintenance was increased by $2,000 from $15,000 to $17,000.

Also to be removed from the draft budget are figures for a 3 percent across-theboard pay raise for nonelected city employees and money for a possible change over from the current 401k retirement program to the Arkansas Public Employees Retirement System.

Though city employee step raises will still be in place, other pay will essentially be frozen, at least for the first part of 2010.

“I would rather hold off for now (on pay increases),” said councilman James Fergason. “Then, if six months into the year things change, we can reconsider it,” he said.

“Last year’s increase got us in the ballpark of where other cities are,” said councilwoman Clara Garrett. “If we don’t give raises, we’ll fall behind again.”

“Not if other cities don’t,” said councilman Kevin Johnston, indicating that most cities have frozenemployee pay.

“I don’t want to get into a position where we have to eliminate jobs,” said councilman Jason Barrett.

Hogue encouraged the council to proceed with gathering information on the APERS retirement program, saying the process would probably take a few months before any decision could be made to put APERS in place anyway.

Hogue said the proposed budget could be approved - with APERS figures in it - without actually approving APERS as the retirement program for nonuniformed city employees. Council members, however, asked Hogue to remove the increase for APERS participation from the proposed budget, saying it could always be added to the budget later if the city approves the change.

With the new cuts, Hogue anticipated the budget would work for the city if incoming revenues continue to decline as they have.

“If the revenues increase or stay flat, we may be able to go back and increase some of these things,” Hogue said.

The finance committee and other council members will meet again at 5:15 p.m. Monday at city hall to review budgets for the water and sewer and the street and alley departments. Hogue hopes to present his 2010 budget to the council for approval next month so the city has a budget in place when the new year begins.

News, Pages 1 on 11/11/2009

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