By Ray King
Members of the Pine Bluff City Council on Thursday began the process of trying to figure out how to deal with what is expected to be a big decline in revenue through the end of the year because of the Corona virus.
At a meeting of the Ways and Means Committee held remotely, city Finance Director Steve Miller said the city’s reserve fund has just over $4 million in it, and at the current level of spending, that will be reduced to just over $100,000 by the end of the year.
Mille offered several different scenarios for saving money, including taking $450,000 that is in this years budget for police cars and switching from a cash deal to a loan, shutting down operations at the Pine Bluff Convention Center until the building is able to hold events again, and laying off or furloughing employees.
Miller also said money could be saved by not filling currently vacant positions, reducing employees work schedules from five days a week to four, and not beginning any new projects. Projects that are currently underway, such as renovations at the Merrill Center would however continue.
He said the payroll for city employees including elected officials is about $3.7 million and a 20-percent reduction would save roughly $700,000 annually.
Council member Ivan Whitfield said that in past years, $500,000 was put into the reserve fund. Miller said last year, the council voted to reduce that figure to $250,000 and that amount is figured into the current total.
“When we get back to normal, I think we should adhere to putting back $500,000,” Whitfield said. “My concern is having to use all that reserve.”
He also questioned the city’s financial commitment to the Go Forward Pine Bluff initiative and Miller said the amount of sales tax that will be collected from the Go Forward tax will be reduced, just as the sales tax collected by the city.
On the subject of reducing employees from a five-day workweek to four days, several council members voiced their opposition with Whitfield saying that some employees survive payday to payday and any reduction in pay, particularly a 20 percent cut would put them in a difficult position.
The discussion then turned to furloughs which Miller said the city would not get a big savings out of because as he understands it, the city would be responsible for putting in half of the $600 weekly that employees who were laid off because of the Corona virus currently receive. He said that he still had to clarify that with the Arkansas Municipal League.
“If we do nothing our reserves are depleted,” Council member Joni Alexander said.
Those employees who are furloughed would be able to sign up for unemployment and would still be considered city employees. They would also continue to have health insurance which the city currently pays for.
Alexander asked how long the furloughs could last and Miller said it depended on the virus and when the economy opens up, will we see a bunch of new cases, or will a vaccine be developed.
“When we get to the end of the year, we will have a better picture,” he said.
Council member Glen Brown Jr. suggested that Mayor Shirley Washington and city department heads get together to come up with a list of employees who can be furloughed and lost to their various departments potentially to the end of the year.
“At some point we know the casino is being built and we know that it is going to open,” Miller said.
“None of these are easy decisions to make but we have to make them,” Council member Win Trafford said.