Fayetteville Enters 2002 with Plenty of Problems

The late comedian Jerry Clower once asked, “Where will you be when you get where you’re going?” As 2002 approaches, Northwest Arkansas city governments are looking to answer that question.

There was no major economic push to help Fayetteville’s coffers in 2001, setting the city’s budget with a projected deficit of about $2.5 million. It had originally expected to use only $600,000 of the reserve fund.

By contrast, Springdale is projecting excess revenues of $438,100 for 2001.

Bentonville has a budget deficit of slightly more than $2 million, but it’s fund balance has grown to $7.5 million. The accounting method for its budget projection is different than the two larger Washington County towns.

Stewart Smith, director of finance and administration for Bentonville, said setting back money for the fund balance “reminds me of an old saying my pastor used to say. ‘Some people operate on the theory, get all you can, can all you get and sit on the can.’ But I don’t think the city should do that. If we’re holding back 25 percent [of revenue] a lot of people think that’s too much. Their rates and taxes could be lower or we could provide them with more services.”

Rogers has not projected its year-end budget figures.

Fortunately for Fayetteville, it had a reserve fund — similar to Bentonville’s fund balance — of $10.5 million. Springdale has $2.1 million in reserve. Little Rock only has $800,000 in reserves and many cities don’t even have a reserve.

Nevertheless, for the first time in nine years, Fayetteville has had to delve into those reserves it had built during the eight-year administration of former Mayor Fred Hanna. And it has already budgeted into 2002 another $2 million of the reserves, which means during Mayor Dan Coody’s first two years in office, 43 percent of what had been saved in the reserve fund will have been eliminated.

Interestingly, Coody’s first-year salary of $74,041 is higher than Hanna ever earned in a year.

Hanna’s administration had also built a $4 million emergency contingency fund, somewhat of a storm fund rather than the usual rainy day fund.

“Definitely a big setback for [Fayetteville] was that we didn’t let any road projects that I would classify as road projects,” said Bob Davis, a member of the Fayetteville City Council and Coody’s appointed vice-Mayor.

“And improving our infrastructure just didn’t occur. Those are probably my two biggest disappointments. The good thing is we can take those same dollars and roll them over to 2002. This year we should see some pretty good road projects.”

Davis said it was hard to be overly optimistic for the 2002 outlook when the city will begin the year with a $1.9 million deficit

“Once you lose those dollars you have a hard time ever getting them back,” Davis said. “They don’t usually come around the corner and meet you on the street. As a city council, we have got to be careful in looking at additional items brought before us this year.”

One of the complaints recently has been some of the hiring practices of city employees. Many have been brought in at questionable salaries, particularly for a city losing money. The most controversial hire has been the new Parks Landscape Architect, Steve Hatfield, who began at $40,000, 35 percent higher than the minimum requirement ($29,606) and 96 percent of the maximum that position can earn ($41,734).

A 20-year veteran police officer in Fayetteville only makes $35,852. Even with the new raises in 2001, that same policeman will earn only $37,800.

City positions are posted inside the police department, and Assistant Chief Rick Hoyt said many of his officers are always writing editorials beside the salaries.

“They see the wages some of the jobs make and they’ll say, ‘What’s the deal here?'” Hoyt said. “A starting police officer next year will earn $12.01 an hour. They see some other positions that earn that that are in no danger.

“How many people can say the last time they ever had a drunk puke on them? Maybe people just assume police make a lot of money. But how many people would want to take their gun in their hand and go in a dark warehouse in the middle of the night when an alarm went off, and go search in the dark not knowing what’s in there? And how many people are willing to sacrifice not being home for the holidays and work different shifts? And it’s not just some police, but firefighters, dispatchers, jailers, all emergency workers. Maybe someone some day will say, ‘Why don’t we pay the police the highest wage of anyone in the city.'”

Fayetteville will get additional revenues with the expansion of CMN Business Park and the new construction along Joyce Boulevard. And in 2002, the $3.1 million renovation of Dickson Street will probably have a positive economic impact on the downtown area.

Another member of the city council, Brenda Thiel, believes Fayetteville can withstand tough economic times because “even in worst of times people in Fayetteville have been able to spend money. The student population here certainly helps.”

Thiel said money going to promote the parks system through the Advertising and Promotion Commission promotes Fayetteville, which in turn brings in revenues.

“I see it as kind of a win-win,” Thiel said. “And we will see more of that next year. I’m really pretty optimistic because the economy has never hit Fayetteville as hard as others. Obviously, the University of Arkansas helps a lot. We don’t derive very much money from property tax, so all of our income is generated through sales tax.”

Thiel also has a different opinion than Davis on the attitude of city workers.

“I think the moral is back up with city employees,” Thiel said. “We offer employees in the city great benefits, better than almost anyone in the private industry.”

Thiel said the warning city budget manager Steve Davis recently gave the city council was an appropriate cautious approach.

“I think Steve Davis is a very cautious person,” Thiel said. “He’s the type person you want in this position. He’d been warning the past administration of the same problems.”

Rogers has probably enjoyed its best year on record with growth. Larry Daniel, the newest member of the Rogers City Council, said everyone from Mayor Steve Womack to the city’s residents have helped boost the city’s finances.

“We’ve been in a situation where we didn’t really have many shopping places or hotels like the others cities had,” Daniel said. “We’ve got them coming on line now. And we’ve got additional projects coming into this area that are just now in the planning stages that will continue to make an impact.”

Springdale’s growth has had both positive and negative effects on the town. New schools are going up at the rate of one every other year. And new roads are needed.

“Our city fathers 20 years ago couldn’t have possibly have seen this much growth coming,” said Springdale City Council member Larry Gibson. “It’s off the chart. The council as a whole is going to have to recognize our need to build our infrastructure. We have to pre-plan for the next 20 years of growth, instead of kow-towing to three or four special interest groups in town.”

City Employees

City — Mayor — Salary

Fayetteville — Dan Coody — $74,041

Springdale — Jerre Van Hoose — $79,537

Rogers — Steve Womack — $72,500

Bentonville — Terry Black Coberly — $70,000

City — Police Chief — Salary

Fayetteville — Richard Watson — $71,262

Springdale — Mikel Blocker — $66,892

Rogers — Tim Keck — $64,319

Bentonville — James Allen — $68,598

City — Fire Chief — Salary

Fayetteville — *Mickey Jackson — $67,250

Springdale — David Hinds — $66,892

Rogers — Rick Williams — $62,378

Bentonville — Dan White — $64,438

City — City Attorney — Salary

Fayetteville — Clinton Jones — $64,118

Springdale — Jeffrey Harper — $72,535

Rogers — Ben Lipscomb — $68,890

Bentonville — Camille Thompson — $54,080

Rogers’ salaries are 2002 projections. *Jackson retired in November.