Three city officials said late Thursday afternoon that the city’s sanitation department reserve has the same problem as the general fund reserve did earlier this month: it’s millions less than the Conway City Council was told it was when money was spent out of it.

Alderman Mark Vaught said that he had visited City Hall earlier Thursday to ask about the sanitation fund reserve, which he’d heard "through the grapevine" might have been lower than the figure provided by city finance staff.

Vaught said that Mayor Tab Townsell confirmed this to be true when they spoke, and that the sanitation reserve figure used by the council when purchases including a $1.5 million automated recyclables sorting machine out of these reserve funds were approved had been artificially inflated by the inclusion of an Arkansas Department of Environmental Quality fund mandated by the state to be maintained for the costs associated with the eventuality of closing the city landfill.

And so, Vaught said, with the removal of this ADEQ fund from the sanitation reserve figure, as well as the expenditures from the fund made by a council that was told by finance staff that there was about $4.5 million in it when, in truth there was about $2.5 million in it, his calculations put the actual current amount of the sanitation reserve at about $500,000.

Cheryl Harrington, director of the Conway Sanitation Department, said later Thursday afternoon that this was also her understanding of the situation.

"The council at that time asked me if I was comfortable with the amount of money that we had to do this (purchase the $1.5 million automated recycling machine)," Harrington said. "I told them ‘yes, based on the figures that were given to me.’"

Harrington said that an e-mail in October from city Chief Financial Officer Robin Scott in stated that her department’s reserve was about $4.5 million.

Harrington was again told by Scott at a special city council meeting held on Feb. 5 to discuss sweeping budget cuts to remedy the general fund reserve shortfall that her department’s reserve was in good standing.

She found out earlier this week that it wasn’t.

"It’s just a nightmare," she said.

Alderwoman Mary Smith said Thursday evening that Harrington "would have never in a million years come and asked us for a million-and-half-dollar piece of recycling equipment if she knew," and that if the council had known the sanitation reserve’s true figure, "we would never have approved that machine or most of the other things" spent out of it in 2009. 

The sanitation reserve would have to be brought up to a prudent level for the same reason as did the general fund: to ensure that enough of a "cushion" exists to cover the uncertain but eventual expenses incurred through the failure of equipment and the ebb and flow of expenditure and receipt of money, according to Vaught.

Harrington, Smith and Vaught each said that the new remedy to the new reserve problem had been presented to them by Townsell as a loan of about $2 million.

The three said that it was their understanding that the subject of a loan would be discussed at Tuesday night’s regular Conway City Council meeting.

Smith said that she couldn’t vote to approve such a loan "until I see some numbers in writing and how they arrived at these numbers."

"I’ve got to have a paper trail," she said. "I can’t take anything at face value. I’ve got to see it in writing and I can’t take it on anybody’s say-so.

"You put your faith and trust with the CFO of a city ... and, you know, you kind of lose faith a little bit — you lose faith a lot, actually," she continued. "I’ve lost faith."

Smith added that she would not be in favor of adjourning on Tuesday night "until we get some closure."

"The meeting may last until midnight," she said. "We may be there a while, and I’m hoping the other council members feel the same way I do."

Townsell explained Thursday that the loan would be used to pay for the automated recyclables sorter and outfitting new patrol cars for the Conway Police Department, which were also to be paid for out of the sanitation reserve. Adding these expenditures back into the sanitation reserve would bring the level of this reserve near where the council thought it would be after approving the purchases in cash, Townsell said. 

Restoring the reserve through a loan shifts the burden to sanitation operational funds, which will be used to service the debt of 5-year financing. Townsell said that he believed sanitation operational funds would be sufficient, though cost-cutting would be needed in the day-to-day operations of the department. He also said that salaries and jobs within the sanitation department would not be impacted.

(Staff writer Joe Lamb can be reached at 505-1238 or by E-mail at joe.lamb@thecabin.net. Send us your news at www.thecabin.net/submit.)