SPRINGDALE — The Springdale City Council looked at protecting its Capital Improvement Program fund Monday by limiting what it purchases.
The council, in consecutive meetings of its Street and CIP, Police and Fire and Finance committees, decided to adjust the 2013 budget instead of paying for equipment requests from the improvement fund.
At A Glance
City Department Equipment Requests
-Fire Department Life packs $265,128
-Administration maintenance truck $20,660
-Ten Police Vehicles $213,000*
-Computer System replacement $392,000
-Two Buildings vehicles $37,150
*Police Equipment fund would pay $147,000
Source: City Of Springdale
The choice is up to the council to pay for projects from the improvement fund or the general fund, said Mayor Doug Sprouse.
“We haven’t had the luxury of having money in both funds for a while,” Sprouse said. “We do need to make sure we have enough in the general fund for cash flow.”
The committee voted to send a proposal to the full council to stop reserving $5 million per year from the improvement fund for the Don Tyson Interchange. The money already reserved, $18.4 million, would become available for other projects or saved for the future.
Payment for the interchange, at the intersection of Don Tyson Parkway and Interstate 540, will come from a bond sale.
Springdale voters approved selling about $66 million in bonds for streets, parks and fire station construction in August. The interchange will be built with street money from the bond sale.
The bonds will be repaid with revenue from a 1 percent city sales tax. The tax, which is projected to bring in $10 million in 2013, was first approved by voters in 1993.
Half of that sales tax has been going to the general fund and half to the improvement fund. The bond payment will come from the improvement fund half.
A schedule calls for a $4 million payment on bonds in 2012, with the repayment going up $100,000 per year until the bonds are paid.
The bond payment will leave about $1 million projected going to the improvement fund in 2013.
The balance of the fund is $19.5 million, as of Dec. 31. Proposals in front of the committee Monday asked for about $1 million from the improvement fund.
“I’d like to see us keep a good balance in the improvement fund,” said Rick Evans, chairman of the CIP committee.
Alderman Jeff Watson said he supported Evans’ idea but that the council should realize both funds were the city’s money.
“What we are doing is moving money from the savings account to the checking and vise versa,” Watson said.
The committee decided about $600,000 would come from the general fund. That covered 10 new vehicles for police, one for administration and two for buildings. It also included emergency medical equipment for the Fire Department.
The improvement fund should pay for $392,000 in computer equipment.
“With the length of time the equipment is going to last, I think it’s appropriate to buy it from CIP,” said Alderman Eric Ford.
The general fund has an unreserved balance of $6.9 million at the start of the year, said Wyman Morgan, city director of Administration and financial affairs.
Ford and Alderwoman Kathy Jaycox warned that the sales taxes collected by the city could change. Sales taxes collected from the sale of alcohol to Benton County residents will soon fall, Ford said. Benton County voted in November to allow alcohol sales.
The new Walmart, planned to be located off Elm Springs Road, would bring more sales tax to the city, Jaycox said.