Springdale mayor introduces 2021 budget

Springdale City Hall is shown in this undated file photo.
Springdale City Hall is shown in this undated file photo.

SPRINGDALE -- Mayor Doug Sprouse introduced his $56 million budget for 2021 to members of the City Council in a special session Monday night, saying the city was in a better financial situation than it has been for a while. Yet, council members expressed concern that the budget was not balanced with only $53 million predicted in revenue.

"A balanced budget is you've got the money or you know where you're going to get it," Wyman Morgan, the city's director of administration and finance, told the council.

Money not spent in 2020 makes up part of the extra money, he said. The city also received $2.9 million from the Coronavirus Aid, Relief and Economic Security Act, $3 million from the incorporation of Bethel Heights in August and $1 million from refinancing the 2012 bond money in February.

The city's 2020 budget was $50.6 million.

The city expects to start the year with $9 million in the general fund that is not reflected in the budget, which includes just revenue and expenditures, explained Laura Favorite, the city's director of financial services.

"That's cash in the bank," said council member Mike Overton.

The 2021 proposed excess in expenditures is $3 million and does not exceed the cash in the bank.

Morgan also noted Springdale historically has spent only about 95% of the money in its yearly budgets and is projected to spend just 96% in 2021.

"Our department heads have been very careful with the tax dollars during the pandemic," Sprouse said, noting the unspent dollars.

Travel and training were canceled or held virtually, and employee attrition also left money unspent, all of which remains in the general fund.

Sprouse and his financial services staff projects to end 2020 with more than $18 million coming into the general fund from the 1% sales tax -- $1.3 million or an 8.5% increase from $15.7 million collected in 2019.

The city charges a 2-cent sales tax for every dollar spent in the city. One penny of the tax pays for the city's general and capital improvement funds and also makes the payment on the 2012 bonds, Morgan said. The other 1 cent of tax pays 2018 bond debt.

Morgan credited the increase in sales tax revenue to population growth.

Sales tax money that went to Bethel Heights also now will be added to Springdale's coffers, Morgan said.

The general fund reserve will look healthier than it has in several years, Sprouse said.

The city expects the undesignated dollars to sit at almost $8 million at the end of 2020 and nearly $6 million at the end of 2021.

The reserves sat at $6.2 million at the end of 2012, rose to a high of $6.4 million in 2014 and were at under just $3 million in 2019.

The council set aside a $4 million reserve fund after the 2012 bond was passed to cover the bond payment should the city's cash flow run short, Sprouse said. This can happen as a city's revenue and expenditures don't always follow the same schedule.

For example, sales tax money comes in every month, but property tax money from the county arrives at the end of the year, Favorite said.

Morgan explained the reserve is operating money that's in the general fund but not committed. It can be used for emergencies.

"We've never touched that $4 million," Sprouse said.

"But we're still being very careful," Sprouse continued. "Covid could still affect us."

He noted plans introduced last spring for dealing with funding shortfalls and austerity measures easily could be put in place.

"With the budget, we're trying to show the worst-case scenario," Sprouse said. "Both the worst case with revenue and the worst case with expenditures. That's served us well over our lean years."

Morgan said the various city departments' budgets included smaller increases throughout, rather than any large projects and increases. The 2021 budget provides for two new positions in the animal services and planning departments and one each in financial services and information techn0logy.

Chad Wolf, director of the parks and recreation department, in his budget asked for $121,000 in one-time expenses to purchase mowing equipment to outfit the new Shaw Family Park to open in the city's northwest corner. The park will include more than 100 acres, a lot of it grass, Wolf said.

"This is the mayor's proposed budget. Without a budget, he has no authorization to spend money," Morgan said.

Laurinda Joenks can be reached by email at [email protected] or on Twitter @NWALaurinda.

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