LR planners work on $3 million budget shortfall

— Abandoning a University Avenue extension project would save Little Rock $1.1 million of more than $3 million city officials anticipate being short by the end of the year.

"Money is tight," City Manager Bruce Moore said Friday.

After seeing the trend of declining sales tax and city fees continue, Moore is back with a more realistic picture of 2009 revenue.

Moore suggested in a Friday memo to city directors that Little Rock reduce its expected revenue by $3,080,495, with about $1.9 million of that coming from sales-tax collections.

The city approved $2 million in cuts in August to head off a projected $2.8 million deficit but knew at the time the cuts would likely be the beginning of more to come.

Sales-tax collections have dropped by at least 6 percent this summer, but city officials are still hoping to end the year with only a 2 percent decline over last year.

There are no job cuts recommended in this latest budget adjustment. Moore worked with Mayor Mark Stodola and department heads to reduce expenses to balancethe $137 million general fund budget, with the expansion of University Avenue from 19th Street to Asher Avenue high up on the chopping block.

Widening the busy eastwest corridor from four to six lanes in front of the University of Arkansas at Little Rock and adding sidewalks was already on hold. A university spokesman said officials there support the city's recommendation to kill the project.

Moore also had suggested tapping into the city's Waste Disposal Fund again and transferring $1,431,348 generated from trash and landfill fees to the general fund, which covers day-to-day expenses of running Little Rock government.

The solid-waste fund is often used to subsidize the general fund. About $2.1 million was transferred to balance the original 2009 budget when city directors passed it in December 2008, and another $1.3 million was used to balance the 2007 budget.

"I can see once, but three years straight? I would have a real problem with that," said City Director Joan Adcock on Friday.

Adcock hadn't had a chance to review the proposal but said if the city continues to pull from the solid-waste fund, then maybe it's time toreduce residents' trash fees since there seems to be a continuous surplus.

City Director Gene Fortson also has problems with using more of the solid-waste fund's money.

"That doesn't solve any of the real problems. It's like living on your savings account," he said, adding that the economic conditions will have to improve to prevent 2010's budget from also seeing reductions over this year's spending levels.

City directors will review the proposal Tuesday and are expected to vote on the adjustments on Oct. 6. The proposal includes transferring another $1,245,850 from 15 other special project funds that have sat dormant over the past two years.

Of that amount, $104,330 is coming from the city manager's office, some of which was set aside for leadership development, Moore said. Moore said another $50,000 from the planning department was set aside two years ago in anticipation of hiring a consultant to review the city's building codes. The idea never got off the ground because of budget woes.

Acknowledging that city departments have already cut back on supplies, travel and overtime, Moore said the proposed transfers are "thelast time I believe we're going to be able to do that" without more serious cuts.

But Moore said with the proposed changes he thinks the city will be "in good shape" the rest of the year.

Lower fuel costs will account for another $600,000 in balancing the budget. Another $63,985 will be made upby closing Rebsamen Park's 18 hole golf course for nine weeks while the grass is replaced. Other suggestions include cutting $90,260 from zoo operating expenses, supplies and professional memberships.

One fund will see an increase. The Police Department's overtime budget willbe increased $500,000.

"It's typical for us to do a budget adjustment, and this one is probably more substantial than in the past, but I think we'll be able to make it assuming this receives a positive reception from the board," Stodola said Thursday when asked about the anticipated cuts.

Northwest Arkansas, Pages 26 on 09/27/2009

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