The Conway City Council approved Mayor Tab Townsell to pursue his proposed means by which the sanitation fund reserve may be restored.

Townsell will request proposals from banks and other financial institutions for a $2 million, five-year financing arrangement to pay for purchases made out of the sanitation fund reserve in 2009 by a council that was told by former Chief Financial Officer Robin Scott the balance of the sanitation fund reserve was more than $4 million.

The fund was spent down to an inappropriate level, it was learned last week, due to the inclusion of an Arkansas Department of Environmental Quality fund which, though it is composed money generated by Sanitation Department revenue that comes in over operational cost, must be kept intact to address the eventuality of closing the city landfill. 

Inappropriately included among the general fund reserve, this almost-$2.5-million fund created what Townsell described during the meeting as "an artificial sense of confidence" that the fund was greater by a corresponding amount, and it was under this false impression that a mechanized recyclables sorting system set to cost about $1.9 million installed and $750,000 in the form of 12 patrol cars and a fire truck were decided by the council to be appropriate expenditures. 

The 12 patrol cars approved for purchase by the council in December were not ordered as had been planned, and this purchase agreement can still be altered by the council to suit the timeline of the sanitation reserve. The council did not make a decision as to how many patrol cars to order on Tuesday or how to pay for them, as the 5-year loan will be consumed by the mechanized recyclables sorting system.

The order for the fire truck that was to be purchased out of the sanitation fund reserve was cancelled earlier this month when it was discovered that the general fund reserve was similarly overestimated to the council. When a round of sweeping budget cuts was approved by the council in a special meeting Feb. 12, it was decided that the money allocated for the fire truck purchase, about $450,000, would still be deducted from the sanitation reserve and used to buttress the general fund reserve.

This plan is intact, Townsell said, though the fire truck money will remain in the sanitation reserve "to act as an additional cushion to absorb the ebb and flow of money for both (sanitation and general reserve) funds," and will be transferred towards the end of the year from sanitation to general reserve.

The council also voted to authorize Townsell to seek details of his proposed agreement with Thomas and Thomas LLP, Certified Public Accountants to quickly provide aldermen with an accurate accounting of all city fund balances. The council also authorized the creation of an audit committee within the council to oversee these efforts. It was motioned by Alderman Theodore Jones Jr. that alderman David Grimes should head this committee, and this was approved by the council.

This is not a full audit, Townsell told the council, but should give some assurance that the numbers the council will be presented when deciding on the five-year financing arrangement will be true.

Alderwoman Mary Smith voted against authorizing Townsell to contact only Thomas and Thomas, as one of its employees is an associate of Townsell’s, preferring instead that the city begin the public bidding process. Alderman Mark Vaught, who had requested a Legislative audit but was told by a Legislative audit staff that such an audit could not be performed quickly enough to help the council make a timely decision on resolving the financial problems, said that he shared Smith’s concerns, but said he believed the oversight of an audit committee would prevent any influence Townsell’s association with a Thomas and Thomas employee may have from influencing the work of the accountants.

Jones said that he hoped that the findings of Thomas and Thomas would coincide with the submission of proposals for the five-year financing arrangement "in a day or two."

In other business, the proposed 2-percent "beer tax" on alcohol sales within the city was approved.

The amount of the tax was determined largely as a result of Deputy City Attorney Kurt Meredith’s observation that an additional "beer tax" would be at odds with the Conway Advertising and Promotion Commission’s "hamburger tax," which itself was inappropriately applied to alcoholic beverages contrary to the regulations created in the Arkansas Mixed Drink Act of 1969.

And so, the solution arrived at by the council by resolution in a January meeting and by ordinance on Tuesday night was to do away with the 2-percent "hamburger tax" as it applies to alcohol — but still retaining the "hamburger tax" as it applies to prepared foot — and replace it with a 2-percent "beer tax" to be used to bolster the General Fund — resulting in no change to the consumer.

The council voted to table a resolution expressing the city’s intent to pursue a city bus system. There was some discussion during a pre-meeting presentation by Metroplan officials as to the details of federal funding administered by the Arkansas Highway and Transportation Department, which would fund such a bus system through providing 80 percent of the capital cost and 50 percent of the operational cost.

The city’s proposed bus system is included in the current four-year cycle of AHDT Transportation Improvement Program funding, but this money could dry up if the council does not declare its intent to pursue such a system.

Metroplan officials told the council that declaring their intention did not mean dedicating any city funds.

Funds to install and operate a bus system would have to come from Conway Street Department maintenance/new construction money, and all aldermen present expressed their interest in leaving this fund as intact as possible.

The street fund was tapped for some transportation programs, however. Program expenditures omitted from the amended 2010 budget approved on Feb. 12 with the understanding that they would be revisited at a future date included $45,000 for Faulkner County Senior Citizens Center transportation, $30,000 for Faulkner County Council on Developmental Disabilities transportation and $12,500 for the Faulkner County Boys and Girls Club transportation. The council decided on Tuesday that these costs would be absorbed by the street department.

Other program costs which hadn’t been decided on with the rest of the 2010 budget included $40,000 for the Conway Downtown Partnership, $40,000 for economic development through a Conway Area Chamber of Commerce partnership, $160,000 for roadway improvements Bean Street and $25,000 for the University of Arkansas, Division of Agriculture Cooperative Extension Service in Faulkner County.

(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.)