Adjustments to LR budget gain approval

Part of $7.9M revenue drop offset by virus-relief funds

City directors on Monday approved a slate of adjustments to Little Rock’s 2020 budget, which take into account the financial impact of the coronavirus pandemic as well as an earlier adjustment to expenditures.

The city saw an approximately $7.9 million reduction in revenue as a result of the pandemic, which is offset by the $7.6 million in funding that Little Rock received through the federal Coronavirus Aid, Relief and Economic Security (CARES) Act, which the city should have in hand today, finance director Sara Lenehan said Monday.

The revenue drop represents nearly 4% of the roughly $212 million budget for 2020 that city directors approved in late 2019.

Due to closures, the city saw reductions in revenue for charges for services at facilities including the Little Rock Zoo — which accounted for about $2.2 million — as well as its golf courses and the Jim Dailey Fitness and Aquatic Center.

Sales tax revenue also was down by about $873,000. Revenue from licenses and permits was down about $1.3 million.

On April 1, the Little Rock Board of Directors approved about $4.9 million in cuts to the 2020 budget, which came from furloughing nearly 200 part-time workers and cutting funding for summer programs that officials said could not be held because of the safety risk during the pandemic. The budget amendment approved Monday did not include any layoffs or additional furloughs.

Separately, the city was able to reduce personnel spending because of CARES Act reimbursements for the salaries of EMTs in the Little Rock Fire Department.

The total adjustment to personnel costs was $8.5 million.

The city also will receive CARES Act reimbursement for expenses it has incurred as a result of the public health crisis, including technology for teleworking, equipment for reconfiguring spaces to allow for social distancing, communications costs, deep cleaning, and Wi-Fi hot spots the city purchased for students. Those costs total “$4.5 million so far, and the pandemic is not over,” Emily Jordan Cox, the city’s director of strategic operations, said at the board’s Oct. 20 meeting.

The city board routinely makes a series of adjustments to the budget late in the year to account for any gaps between anticipated

and actual revenue and expenditures, but they are not usually this large.

“We normally wouldn’t have to do a budget adjustment of this magnitude,” Mayor Frank Scott Jr. said at a board meeting last month.

He said that thanks to funding from the CARES Act, the city did not have to make adjustments “on the backs of employees.”

Lenehan said the numbers on revenue from this year will be informative for setting the 2021 budget, since the city is not expected to return to within 1% of its 2019 revenue numbers until after 2022 because of the pandemic.

The Board of Directors approved the budget adjustment in a voice vote Monday, during which at-large City Director Joan Adcock voted no. She left before the meeting adjourned and did not return a voicemail seeking comment Monday night.