Searcy Mayor Kyle Osborne

Osborne

An online document detailing the city of Searcy’s need for a 1-cent permanent sales and use tax was called conservative Monday by Mayor Kyle Osborne.

The city recently posted the document, “1% Sales Tax Usage and Details,” on its website, laying out its projected need of $6.5 million annually under a section titled “Why do we need the 1 cent moving forward?” In February, Searcy voters voted down making the city’s eight-year, temporary 1 percent sales tax permanent. The temporary tax, which was passed in 2014, sunsets in June 2022.

The annual needs for the tax listed in the document are LOPFI (Law Enforcement Officer Police and Fire retirement) at $750,000, followed by staffing costs of $1 million, sanitation costs at $522,00, police at $272,000, streets and drainage at $3,098,000, reserve fund for $250,000, and quality of life costs of $608,000.

The eight-year plan had $1.5 million per year estimated for street resurfacing and improvement and drainage, compared to more than $3 million in the new yearly estimate.

Osborne said in the past $450,000 was how much the city was spending on streets but “if you have noticed this year, that almost doubled. We are trying to have a more aggressive overlay program, a more aggressive drainage program. We are more aggressive with it now.”

The eight-year plan also had around $837,000 yearly for staffing needs, compared to $1 million in the new estimate.

Osborne said the amount listed in annual expenditures for personnel without the 1-cent tax being extended ($490,694.52) would be “less than half of what we need.”

“We are having to pull money out of the half-cent and other places just to take care of that, vehicles, insurance,” he said. “These numbers are so conservative. We are trying to show exactly where the money will go, everything that is going to happen and be conservative with it, without having our heads torn off. Mr. [Mike] Chalenburg [a Searcy City Council member] helped put this together and he does a great job. I went over this with him.

“This is one way to explain it. The notion has been made that ‘you paid off the swimming pool so you don’t need that money anymore. You built a concession stand, you don’t need that money anymore. You built your IT building, you don’t need that money anymore.’ I understand where they’re coming from with that but also what people have to understand is that the cost of business keeps going up.”

Osborne pointed to the eight-year plan as an example. “It shows $1.5 million a year for overlay. We haven’t been spending that much. This year ,we are spending right at a million. Drainage $950,000 a year. We don’t always spend that much but when we have a huge project, it may be twice that much, so we have to put down a number. Put down a million, that’s $2 million a year. These are programs that just go on and on and on.”

Osborne said with personnel expenses, the city is paying $13 an hour for CDL (commercial driver’s license) drivers “while everyone else is paying $20. We can’t hire CDL drivers and people get upset when their leaves and limbs and stuff are not picked up. If we don’t have money to give them raises it is difficult so we do the best we can with what we have.”

He said while there are several projects in the eight-year plan that have been paid off, there are also multiple expenses that never really end.

“The big one that I keep harping on are the sanitation trucks that we purchased that are over $300,000 apiece ... apiece. We spent over a million dollars on those things back in 2014, 2015 and we’ve got one with a blown engine right now and it’s going to cost several thousand dollars to get it fixed.

“People don’t care that your truck has blow up, they want their garbage picked up. and I don’t blame them. There is going to come a time in the next couple of years that we will have to start replacing that. We don’t have the money to go out and do it all at one time so you save a little bit, you save a little bit, then you buy them.”

Osborne also mentioned bucket trucks and a street sweeper that was bought used. “There are several things that are ongoing. in the meetings that I have had with the anti-tax group is ‘but all of this stuff is paid off, you don’t need that much.’ They would support a half-cent but they thing one-cent is too much. This community is worth more than a half-cent. There are so many things we want and want to accomplish, but we can’t do that with a half-cent. The sad part is, we lost our penny and people ask me all the time, ‘What are you going to cut, what’s going to be cut?’ And, I will say it again, nothing is off the table.”

In the next couple of months, Osborne said he is hoping he and the City Council will have something worked out as far as going forward. ’We will have an idea of how we want to approach this next time,” he said.

“I hate to say there is a certain group out there that dislikes taxes. We all dislike taxes; don’t get me wrong. This is a wonderful community,” Osborne said. “In 2013, a plan was put in place for a one-cent sales tax that wouldn’t start until 2014, to make some capital improvements to the city.

“The plan was to do an eight-year tax to show the citizens we are transparent. You can see exactly what we are doing with it; it is laid out and we have done that. We have done what we said we would do. We are wanting to do some other things but to do them you will have to do some possible bond issues. You can’t do that when you have a sunset.

“My proposal to the council was ‘let’s ask the voters if they want to do a permanent.’ Keep it the same. Let’s just keep it the same so we know what we are working with. Honestly, my mind has not changed. That’s still in my opinion where we need to be. We need the one-cent permanent tax passed so we can start planning for some things.

“This community deserves it. The citizens want it. You have looked at the surveys. You see what people want. It takes money to have that. When you have people that are not involved campaigning against you, it is extremely difficult.”

Three focus groups meetings, held after the City Council agenda meetings, hosted by Osborne, were to figure out how to move forward after the defeat of the permanent continuance of the 1 percent tax Feb. 9 in a special election.

The city presented two surveys to the focus group members and community, then posted the results along with its tax usage and detailed.

In the details, the city listed “employee benefit needs at $1.75 million.” Under LOPFI needs of $750,000, bullet points state the total annual budgeted need is $1.25 million. Approximately $750,000 is paid from 1-cent revenues, according to the explanation given. The other $500,000 comes from an 0.8 mill property tax, court fees and fines. “The city has chosen to use sales tax revenues for LOPFI instead of increasing property taxes,” the document states.

Osborne said LOPFI is dictated by the state. “We have no control of that. It goes up every year. We’re having to pull money out of the general fund to supplement it. It’s a very fluid number.”

Regarding the staffing needs of $1 million, it is stated in the documentation that prior to the 1-cent sales tax, “Searcy struggled to offer competitive wages and fill needed positions due to fiscal constraints.”

Recurring vehicle and equipment fleet needs are listed at being $794,000. Under this heading, it states that sanitation needs are $522,000. Residential side-arm trash trucks are on the list with a fleet size of three and are said to have a six-year life span. The cost is $360,000, with a trade-in value of $64,800 and an annual replacement cost of $147,600. The residential single-axle trash truck fleet size is one with a life span of six years and a cost of $185,000 and a trade-in value of $33,000. The annual replacement cost is listed as $25,300. Commercial overhead trash trucks have a fleet of three and a lifespan of six years with a cost of $380,000 and a trade-in value of $64,800. The annual replacement cost is $155,800. Commercial single-axle trash trucks are listed as a fleet of one with a lifespan of six years with a cost of $185,000 and a trade-in value of $33,300. The annual replacement cost is $25,300. Leaf pickup boom trucks are listed as having a fleet size of six and a lifespan of six years. The cost is listed as $150,000 and a trade-in value of $27,000. The annual replacement cost is $123,000. Annual maintenance for the Beast mulch grinder is $45,000.

The police needs, listed as $272,000, are broken down into patrol vehicle replacement with a fleet size of 36 and a lifespan of six years. The cost is listed as $36,000 with a trade-in value of $0 and annual replacement cost of $216,000. Investigator and administrative vehicles have a fleet size of 20 and a lifespan of 10 years. The cost is listed as $28,000 with a trade in value of $0 and replacement cost of $56,000.

Under street, drainage and sidewalk needs, potholes and sidewalk maintenance is listed as $200,000. Personnel comes in at $490,694.52. Buildings, grounds (utilities, equipment, insurance, etc.) is listed at $26,361.50. Vehicles (service, fuel and insurance) comes in at $89,632.87. Supplies are $800. Maintenance is listed at $50,000. Traffic control/street signals and signs come to $77,000.00. Drainage comes in at $75,000, street lights $300,000 and the overlay program is listed as costing $450,000. These annual expenditures total $1,759,488.89, according to the city’s listing.

Without the 1 cent, the street fund annual revenues would be highway turnback money of $1,145,000; severance taxes of $20,000; street property tax (county turnback) of $225,000 and Arkansas Department of Transportation construction distribution of $485,000.

The breakdown of street, drainage and sidewalks needs comes with a category called “necessary recurring needs.” For street widening and reconstruction (potential projects: Moore Avenue, Booth Road, Holmes Road, Skyline Drive, Pleasure Avenue, etc.) the total cost is listed at $46,000,000 with an annual cost of $2,300,000.

Bridge widening and reconstruction (potential projects: South Pecan, South Elm and North Ella streets) comes in with a total cost listening of $2,250,000 and an annual cost of $113,000. Drainage needs (Gin Creek, East Searcy Detention, lorio Creek culverts, etc.) is listed with a total cost of $8,900,000 and an annual cost of $445,000. The annual drainage program is listed at a total cost of $2,400,000 and an annual cost of $120,000. The annual sidewalk program (10-15 blocks per year) is listed at a total cost of $2,400,000 and an annual cost of $120,000.

The reserve fund, listed at $250,000 annually, comes with a goal of building reserve up to $5,936,036 (90 days cash on hand based on the 2019 audit). Its purpose is listed as a rainy day fund, savings fund to secure financial status into the future, potential matching grant acquisition funds and potential future opportunity and economic development funds.

Quality of life needs, listed at $608,000, were explained as being “future operating revenues for quality of life projects. While maintaining and investing in essential service has to be our priority, we are committed to investing in quality of life projects,” the city stated. “These will be used for Parks and Recreation operations, park projects.”

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