A major step in the process to build a combined City Hall and school administration building occurred Dec. 29 when the City Council decided how to finance the city's share of the structure.
After hearing presentations from First Security Bank and Raymond James Financial Services/Arvest, aldermen unanimously selected Raymond James/Arvest as the financing authority.
From Staff Reports
The Pea Ridge Police Department’s budget contains revenues that don’t readily show up in the city’s overall budget, according to Police Chief Ryan Walker.
That income not showing up directly in the Police Department budget includes:
• $2,500 donation for car seats.
• $8,000 donation from a private donor. Walker explained that a Pea Ridge resident regularly gives a donation, but prefers to remain anonymous. The donor does not specify how to spend the money. Walker said it was spent on various things including door locks and a desk for administration.
• $32,000 salary reimbursement from the school district for school resource officer
• $4,200 state grant for IT and a camera for the detective
• $18,000 transfer from impact fees
• $10,000 from Street Department for transfer of pickup truck used by former police chief
• $4,000 credit for old truck (transferred to Street Department at a discount)
Additionally the retirement plan budget was underestimated by approximately $70,000, while worker’s compensation had the same problem of approximately $28,000.
In the middle of the year, the department added two unbudgeted positions — a 13th police officer and a clerk. A clerk was added to the staff, at a cost of $32,000. This person performs clerical duties, that alleviate some of the office work on patrol officers.
“A couple of big (expenses) this year that were unexpected were replacing carpet with water damage, approximately $3,000 to $4,000 that was supposed to go on last year’s (2014) budget,” Walker said. “But I didn’t get the invoice in on time so it went on 2015.”
Another expense, Walker said, was a third air conditioning/heating unit that should have been added when the original two units were added when the police department moved into the current building in late 2009. Additionally, duct work had to be modified to incorporate the third HVAC unit. This project cost $7,000.
The police station was insulated at a cost of $2,500.
There was a security update to the police station, Walker said, the majority of which was covered by a $10,000 grant that the City obtained.
Walker said there was also $2,500 received by the Arkansas Chiefs Association for bullet proof vests.
Both proposals utilized the city's franchise fees -- levied on utilities and services provided by businesses -- to pay off the financing. The financing would be through loans rather than bond issues. That avoids complicated record keeping, speeds the process of obtaining the loan and avoids the risk of marketing bonds to investors.
The city's half of the project is $1.1 million.
First Security proposed a 30-year loan of $900,000 at an interest rate of 3.855 percent. The balance of the amount would come from the city's reserves.
Arvest proposed a 20-year loan for the entire amount, at an interest rate of 3.1 percent -- but included a plan to pay the loan in under 15 years.
At the start of the Raymond James presentation, Daniel Allen, associate vice president of the company, said Arvest Pea Ridge president Jeff Neil approached the company saying, "The city has started this process. How do we finance this?" Later in the meeting, he said, "I have to say that without Jeff, I would not be sitting here. His first comment was 'what can we do to help the city?'"
Alderman Ray Easley said he likes the idea of using a local bank. After further discussion, Easley said, "Go local. Arvest."
"Is that a motion?" Mayor Jackie Crabtree asked.
Easley answered, "Yes."
The motion was unanimously approved.
Earlier in the meeting, the council approved the amended budget for 2015. The council meeting was held as late in the month as possible so the numbers could be finalized.
The original budget projected revenues and expenses of $4,027,478, while actual revenue and expenses was $4,622,677 -- an increase of $595,169.
City clerk Sandy Button reviewed the budget by noting which departments varied from the original budget.
The one department with significant variance was the Police Department.
The City General Fund saw an increase from $2,747,594 to $3,415,750.
A third of that was in the Police Department.
The increases in City General -- other than the Police Department -- shown as the increase followed by the actual, were:
• Legal fees: increased $20,000 to $50,000
• Engineering: increased $43,000 to $44,000
• Insurance: increased$1,500 to $3,500
• Printing/supplies: increased $2,000 to $16,000
• Building repairs: increased $13,000 to $20,000
• Disposal service: increased $25,000 to $45,000
• Other: increased $15,000 to $30,000
• Taxes-unemployment: increased $1,000 to $2,000
• Transfer county tax: increased $105,000 to $915,000
• City sales tax: increased $90,000 to $340,000
• EMS improvement: increased $3,100 to $5,000
• Street lights: increased $16,000, to $22,000
• Mule jump: increased $4,000 to $21,000
• Retirement: increased $2,000 to $6,000
• Transfer to fire: increased from zero to $30,000
• Transfer to street: increased from zero to $52,000
• Dog: $3,050 to $11,150
• Court: $2,700 to $92,700
Note that, while some of these show on the budget as expenses, they reflect an increase in revenue. Examples include transfer of county tax and city sales tax.
The increases in Police Department, shown as the increase followed by the actual, were:
• Salaries: $83,000 to $665,000
• Payroll taxes: $8,100 to $50,100
• Group insurance: $3,000 to $48,000
• Insurance, legal fees: $22,000 to $27,000
• Printing and supplies: $1,800 to $6,000
• Training: $1,000 to $6,000
• Equipment: $31,000 to $76,000
• Clothing allowance: $4,000 to $12,000
• Miscellaneous: $8,000 to $11,000
• LOPFI: $50,000 to $118,000
• Remodel building: $5,000 to $16,000
• Dues: $500 to $1,500
• Contract labor: increased from zero to $1,500
The vehicle repair account was down $3,000 to $45,000.
The Street Department budget rose from $620,500 to $632,600.
Fire and Ambulance Department dropped from $511,324 to $491,810.
Library budget dropped from $100,935 to $33,707 because a grant did not come through.
Park budget dropped from $27,125 to $26,810.
For details on the Police Department budget, see the related story.
At the end of the meeting, the council approved a 3 percent cost of living increase for all city employees.
The council also approved a resolution authorizing a contract with McClelland Consulting Engineering for design work on a sewer line extension on Arkansas Highway 72 west. The line will run from Maple Glen to the Dollar General store and the Church of the Nazarene.
Rather than hiring a contractor to install the line, city employees will perform the work. According to Ken Hayes, Water/Wastewater superintendent, by doing the work in house, the cost is cut by two thirds.
General News on 01/06/2016