At the last two Conway City Council work sessions, one held on April 1 and the other on Tuesday night, the council has heard from its department heads about what they need.
Generally speaking, they need to send their employees to other cities or states for training. They need to replace machinery and vehicles that break. They need more employees. The council heard all of these things at its last two work sessions.
However, these things — mostly costs that are unforeseeable but to be expected — are not budgeted for 2014.
In January, in the wake of the 2014 budget’s passage, the Conway Fire Department’s specialized air compressor for filling their SCBA bottles with compressed, breathable air, malfunctioned and compressed a bore-full of coolant water — which doesn’t compress. The out-of-warranty compressor block cracked, resulting in a total loss and a need to spend about $19,800 on a new unit. This was the first of the unforeseeable but expectable expenses.
Then, in February, the Conway City Council authorized about $130,000 for the also-un-budgeted replacement of most city computers still running the Windows XP operating system, most of them in the police department, because Microsoft ended its XP antivirus and support services.
Add in a handful of vehicle repairs and other costs and, as of Wednesday, the city has spent about $200,000 more than was budgeted.
Add to this city IT director Lloyd Hartzell’s presentation to the council on Tuesday night, in which he said that as much as $3 million could be spent to upgrade the city’s aging emergency radio communications infrastructure, and some in and around city hall are concerned.
Hartzell clarified that the $3 million figure represented a raw number to replace almost each and every component of a 10-year-old system that it nearing the end of its support from its maker, Motorola, and that after identifying which specific pieces of equipment strictly needed to be upgraded, the city’s cost would be less.
The city’s budget has been tight since around 2010, when several previous years’ worth of more-or-less steadily rising retail sales tax income started to falter. In 2011, the city started presuming a "flat," or non-increasing, sales tax in its budget. Mostly that view was accurate through 2013.
"If all else stays the same," Mayor Tab Townsell said on Wednesday, "we will eat into cash flow to the extent of $300,000" by year’s end.
The council voted to set aside $500,000 and the end of both 2012 and 2013, resulting in a still-untouched $1 million reserve.
Townsell said that the holding city’s current expenses at or under the city’s current revenue can reasonably be expected to get the city through what he compared to local and state economic "doldrums" — a word describing areas at sea where early sailing ships encountered little or no wind to move them — over the past three years.
Tapping reserves, he said, would be a "last resort."
"Basically, we’re just not seeing any growth in revenue right now. We’re sitting on the starting line and we’re not getting the gas to fuel forward momentum. But we’re not going backwards. That’s the nature of our scarcity.
"It was previously a cash flow and reserve scarcity," he continued, "which we fixed [with the creation of the $1 million reserve among other measures]. Now, with our general fund revenue flattening out in the past three years due to retail sales flattening, we can’t continue to keep up with the cost of growth and inflation — the growing need for police and firemen for example — and so our scarcities move to operations."
When asked what the "tipping point" would be to either tap reserves or find new revenue, Townsell said that, "For my comfort level we are already past the tipping point, but certainly creating new sales tax opportunities are one thing."
These new sales tax opportunities are hoped to come in the form of the Central Landing large-scale retail development of the current airport property, and also in a number of other retail projects that are in the works or in negotiations, Townsell said.
"But if our sales tax economy does not pick up," he continued, "then certain parts of our city budget have to grow - and we either find ways to grow revenue or we find ways to cut expenses so those needs like adding police officers can be addressed."