LR board sets vote today on plan to cut budget 2%
Anticipating the financial fallout related to the covid-19 pandemic, the Little Rock Board of Directors has scheduled a special meeting for noon today to vote on a 2% cut to the city’s budget.
Mayor Frank Scott Jr. presented the proposal to the city board at a meeting Tuesday. It adds up to $4,928,545 in cuts from the city’s current budget of about $212 million for 2020.
City officials don’t yet know the full extent of the impact the spread of the new coronavirus, and the measures authorities have taken to prevent more people from falling ill, will have on city finances.
Scott said the city was in “uncharted, unseen and unbelievable waters.”
“There are some things that we know,” the mayor said. “There are some things that we don’t know.”
Because of the state ban on dining at restaurants and bars, the city’s 9 p.m. curfew, and recommendations to stay home, it’s expected that Little Rock’s sales-tax revenue will be reduced. But since the city receives those dollars about two months late, it won’t know the impact of decreased spending in April until June.
Scott said the proposal is an effort to be proactive and allow the city to take care of the things it can in the short term.
The proposed cuts include:
■ $513,758 from personnel expenses.
■ $493,666 from operating expenses.
■ $2,921,121 from special projects.
■ $1 million from the city’s contingency fund.
The personnel cut will come from a 120-day furlough of part-time employees who are currently not working because of event postponements and closed facilities, measures the city took to stem the virus’s spread by prohibiting large gatherings.
Those employees will receive their last paychecks before the furlough Friday. The city closed its buildings to the public March 18 and announced March 16 that it would reschedule events that stood to draw a large number of attendees.
An exact number of employees
the cuts would affect was not available Tuesday evening. Those employees are eligible to file unemployment claims because of the furlough.
“Tough decisions have to be made to ensure that we protect as many of our employees as possible and to ensure that we carry on with our essential services for all residents,” Scott said.
Ward 6 City Director Doris Wright suggested offering the furloughed employees jobs answering the phone for the city’s nonemergency line, which of late has seen an influx of calls reporting on large groups out in public.
“That way we’d be at least offering them something,” Wright said.
In an interview after the meeting, Scott said he would be open to the idea as the city works to increase the line’s capacity.
Concerned about the financial effect of the pandemic on residents, Vice Mayor B.J. Wyrick said she wanted to look into waiving the sales tax on food and medicine, which the city cannot do because of state law. Wyrick said she had contacted a state senator about it.
“I’m very concerned about the citizens that are out there losing their jobs. …Many of our citizens are one step, or could be one step, away from homelessness with the situations that we have,” Wyrick said.
From the city’s operating expenses, the budget adjustment would cut some contributions to outside agencies and take into account $148,000 in savings from not administering the summer playground program, an annual recreational day camp for children.
If the adjustment is approved, the city will cut $233,333 in funding from the Arkansas Arts Center, $64,000 from the Museum of Discovery and $48,333 from the Downtown Little Rock Partnership.
In the special-projects category, the city would cut $1,362,082 from the summer employment program; save $1,073,334 from suspended contracts for youth service providers; reduce funding for summer recreation by
$300,000; and retain $70,705 from the canceled playground program.
The proposal also cuts $45,000 from legislative consulting; reduces funding for the closed-to-the-public Curran Hall by $25,000; expects savings of $25,000 from the canceled Little Rock Tennis Open; and expects savings of $20,000 from the canceled Sustainability Summit.
The $1 million contingency allocation will be utilized to help offset anticipated revenue reductions.
Should the economic impact be less than anticipated, the city may restore allocations to those areas, city finance director Sara Lenehan said.
Scott said his administration will begin giving the board monthly updates on city finances during the pandemic. He said the expected best-case scenario is that the situation will improve in May, and at worst in August.
He said an additional adjustment is possible as the economic impact becomes more clear and that “all options are on the table to maintain fiscal stewardship in the city of Little Rock.”
Though some members of the Board of Directors and staff attended Tuesday’s meeting in person at the Robinson Center downtown, several participated on video chat because of social-distancing recommendations from the city and the Centers for Disease Control and Prevention.
Residents can watch the livestream of today’s meeting at littlerock.gov or on the city’s YouTube channel.
An exact number of employees the cuts would affect was not available Tuesday evening. Those employees are eligible to file unemployment claims because of the furlough.