SPRINGDALE -- City officials are being cautious in crafting the 2024 budget, keeping revenue projections smaller than in recent years and focusing on employee raises instead of new spending.
"While budgeting very conservatively, not knowing what the economy is going to do over the next year, we were still able to give the raises to our people," Mayor Doug Sprouse said of the projected 2024 budget. "At the same time we were able to cut back on some spending."
The City Council, acting as a Committee of the Whole, reviewed the budget Tuesday and recommended it for approval at this Tuesday's council meeting.
Colby Fulfer, chief of staff to Sprouse, said there are some concerning trends supporting a cautious approach to the budget. He cited concerns over interest rates and inflation at the national level combined with slowing growth in the city's sales tax collection.
"We've seen a slow-down in our sales tax revenue in recent months," Fulfer said. "Last month it was a negative 4%. Basing our projections on that history we're budgeting for a 2% increase. We are being very conservative. We feel like there's going to be considerable shift in our economy."
According to Fulfer, the city is budgeting for revenue of about $84 million and expenditures of about $82.5 million, leaving a budget surplus of $1.5 million. That's after the City Council last week voted to amend the budget and include the cost of 24 new vehicles, adding about $1 million in expenditures.
Fulfer said the city is focusing on finding ways to improve efficiency, allowing officials to avoid new hiring but still rewarding current employees. Most employees will see raises of around 4% in 2024, according to Cody Loerts, the city's finance director. Loerts said the city had a salary study done comparing Springdale to Northwest Arkansas' other biggest cities, and based on that study, some positions were given higher raises. Raises of about 4% for elected officials, City Council members and Planning Commission members were also recommended for approval.
The city is looking at new technology to improve efficiency while keeping costs down, Fulfer said.
He said the city's accounting software, for example, is around 20 years old and requires a good deal of manual data input. A new software program will remove the need for some of that manual data input.
"It takes a lot of time and effort to use that outdated system, having to hand-enter data," Fulfer said. "We can put new tasks on existing employees once their time is freed up. We'd rather pay the one-time expense of the new system than have to hire additional people to keep using the old system."
Fulfer said the city is also looking at new document-scanning technology to simplify the record-keeping required by different city departments which, again, will allow employees to do other tasks.
Alderman Rex Bailey said that, based on his experience with government budgets, the 2024 city budget is a good one.
Bailey said he has been on the council for eight years and also spent six years on the Washington County Quorum Court.
"I've done budgets," Bailey said. "I compare last year's budget to this year's budget, and it's a good budget. I think they've done a good job keeping expenses down while still taking care of our employees."
Sprouse said the process for drafting the 2024 budget went as smoothly as any in his 15 years as mayor. He said the city has seen its general fund reserve grow to about $27 million after seeing it shrink during the "Great Recession" time of 2008 to 2010. In those years, he said, the city sometimes had to use money from the general fund reserve to cover revenue shortfalls, and the reserve dropped to around $1.5 million at one point.
"We were sort of reeling," Sprouse said of the recession year budgets. "These last few years we've been able to recover. The growth and new development we're seeing, especially in downtown Springdale, has put us in pretty good shape."
"It's a safe, conservative budget," Sprouse said of the proposed 2024 budget. "We always try to under promise and over perform."