Bentonville approves 2016 budget

BENTONVILLE -- The City Council approved its 2016 budget Tuesday after discussing a matching grant for a pedestrian tunnel and capital expenses for the Electric Department.

James Smith, Ward 3 alderwoman, brought up a grant the Walton Family Foundation recently offered the city. It would put a pedestrian tunnel under Southeast 14th Street at Southeast P Street. That's in front of the Walton Life Fitness Center.

Budget by the Numbers

Bentonville’s 2016 budget’s expenses are $1.35 million below projected income.

The total revenue is predicted to be at $134.9 million with expenses being $133 million and $585,000 in transfers.

That includes a 1.5 percent cost of living adjustment and 1.5 percent merit-based raise for all eligible city employees.

The general fund revenue is projected to be $36.4 million with $35.7 million in expenditures, leaving a net of $648,525. That’s a 141 percent increase from 2015’s budgeted $269,358.

Source: Staff report

The project would be $2.5 million, but the grant would pay for 90 percent. The city would pay the other 10 percent, which would be $250,000.

Smith cited information published by the foundation to illustrate the use of the South Bentonville Trail in that area. Trail counts showed an average of 3,636 pedestrians and cyclists a month cross that intersection in the spring months, he said.

"It's an out of body experience if you're not careful," said Smith, who is a cyclist.

The foundation approached the city Oct. 15 and Smith met with Mayor Bob McCaslin on Monday to discuss the grant, Smith said.

The 90-10 grant is a gift the city should find a way to accommodate, even if it's not in this budget, Smith said.

McCaslin explained the budget process began in August. All department heads were asked to not request any capital projects that were noncritical to the operation of their departments since the city will build an estimated $27 million maintenance and utility complex in 2016, he said.

The grant is a great offer, but it's a matter of prioritizing, McCaslin continued.

"A quarter of a million dollars is a lot of money," he said. "I have to prioritize a lot of things. A lot of things, a lot of good things, don't make the budget."

The project could be done in two phases with the design phase being considered at the end of next year when the 2016 budget is being closed, said David Wright, parks and recreation director. That phase would take at least eight months and roughly $30,000. The project and budget could be evaluated after that, he said.

It's also something the Parks and Recreation Advisory Board hasn't had a chance to vet yet, Wright said.

The 2016 budget already has been modified once to add $75,000 for trail maintenance after Tim Robinson, Ward 2 alderman, requested it earlier this month.

Bill Burckart, Ward 3 alderman, also asked the council to consider restricting money for the Electric Department's capital expenditures to $3.5 million as outlined in the rate study done this year. The 2016 budget has $4.1 million for electric capital expenses.

Burckart asked the difference be set aside to build up a reserve that could be used for capital expenses once the final financial numbers are known for 2015. It would be an effort to prevent electric rate increases two and/or three years from now.

The council approved a 10 percent increase to electric rates over the next three years at its Nov. 9 meeting. Rates will increase 4 percent in 2016, 3 percent in 2017 and 3 percent in 2018. Burckart was one of four council members to vote against them.

There's a difference between the rate study and capital improvement budget, said Travis Matlock, electric engineering director. The rate increases were already voted on so an amendment to the budget wouldn't change that.

The rate study was developed based on revenue requirements, but the budget is based on what the department needs, Denise Land, finance director, added.

Matlock said there were a few items added to the capital expense list as needs arose after the capital improvement plan was presented for the study in February.

Burckart said he's talked with a retired resident who has expressed concern about paying utility increases on a fixed income. If the Electric Department receives more revenue than projected and keeps the capital improvements to what is listed in the rate study, then there's a chance all three increases may not have to happen, he said.

There's no flat line when it comes to capital needs, McCaslin said. The Electric Department is the city's most important revenue-generating entity.

"These are not impulsive items that made the budget," he said. "These are items that need to be replaced so he can have continuity of service."

Also, another consultant would have to be hired to do another study to see if the city could do without the approved rate increases, Matlock and Land said.

Burckart withdrew his motion, and council approved the 2016 budget 6-0.

NW News on 11/26/2015

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