Committee gives preliminary OK to HSMP budget reduction

Preliminary approval was given last month to a $25,000 reduction in the Hot Springs Metro Partnership’s 2019 contract for services with Garland County, as justices of the peace struggled to assign a value to the service the county receives from the nonprofit economic development corporation.

The county appropriated $75,000 for the service this year, allocating it in monthly installments after partnership CEO/President Gary Troutman reports on the organization’s activity for the month to the Garland County Quorum Court.

The quorum court’s Finance Committee approved the one-third reduction during last month’s budget meeting, with District 2 JP Thomas Anderson motioning for the cut and District 11 JP Larry Griffin seconding it. The measure passed in a voice vote, with District 13 JP Larry Raney abstaining.

The county finance department said all of the budget scenarios the Finance Committee will consider Monday night

while making its final budget recommendation to the full quorum court reduce the partnership’s appropriation to $50,000.

District 12 JP and County Judge-elect Darryl Mahoney said earlier this week that the appropriation level isn’t final, explaining that it and other items, including the 2 or 3 percent cost-of-living adjustment JPs will consider, are contingent on where total general fund appropriations are in relation to projected revenue.

State law restricts county funds from being appropriated beyond 90 percent of expected annual revenue. Budget scenarios under consideration Monday night appropriate

84.40 to 86.07 percent of the

$21,340,261 expected to accrue to the general fund next year.

The Sentinel-Record sent two emails to Troutman earlier this week asking for comment, but had not received a response by press time Friday.

The committee said reducing the appropriation would offset the $8,000 increase it approved for the West Central Arkansas Planning and Development District. The nonprofit economic development corporation’s services include administering grants for cities and counties in its 10-county area.

It and the state’s seven other planning and development districts were the conduit state legislators used to pass General Improvement Fund grants to applicants in their district prior to the practice being discontinued after numerous legislators were implicated in using the grants to facilitate kickbacks.

West Central was a Small Business Administration lender but failed to process enough loans in state fiscal years 2015 and 2016 to retain its status as a certified development corporation.

Mahoney told the Finance Committee the partnership is the liaison between the county and businesses looking to bring capital and jobs to new areas, a role he said is difficult to quantify monetarily.

“If there’s a firm that needs a 100,000-square-foot building with 20-foot sidewalls and 25 overhead doors, they’re probably going to contact someone there,” he said. “I do think there’s some value to that, but I can’t put a price on what it is.”

District 9 JP Matt McKee, the chairman of the county Finance Committee, said he did not see the benefit in contracting with the partnership, a position he said he’s held for several years. McKee voted to discontinue partnership funding in 2015 when the county chose not to contract with the organization over what it said was a lack of advocacy for growth and development in the unincorporated area.

The partnership also has a $100,000 annual contract for services with the city.

“I’m still not sure why we pay them, but that’s something I’ve been saying for the last several years,” he told the committee. “It’s something we do to make everyone feel better.”

The committee said subsidizing economic development is counterintuitive in light of a city of Hot Springs utility connection and extension policy the county said inhibits growth in the unincorporated area. The policy limits commercial water and wastewater connections outside the city to one five-eighths inch meter per lot of record in the planning area and prohibits extending water and sewer mains in the unincorporated area.

The partnership told the committee earlier this year that The Greater Hot Springs Chamber of Commerce, which shares staff, office space and executive leadership with the partnership, supported 2017 legislation that would have liberalized the city’s policy.

The legislation died in the state House, leaving the partnership to deal with the fallout, Troutman told the committee in May.

Mahoney said a meeting the partnership held on water policy earlier this year failed to produce any movement on the issue.

“That’s probably just as much my fault as it is anybody’s,” he told the committee. “I haven’t pursued anything because we’ve moved to the point now that I know until after the election there’s no reason for me to take it back there and talk to anybody about it.”