The city’s 2020 budget is performing better than expected in the midst of the coronavirus (COVID-19) pandemic but city officials are still remaining cautious as they head into the 2021 budget preparation process.
During a Finance Committee meeting Sept. 10, committee chairman Vance Williamson reported that revenues were up for the year in each of the city’s four sales tax categories, including the one-cent tax (1.2%); quarter-cent (3.2%); solid waste (a one-cent tax that is split with Union County, 2%); and the one-cent El Dorado Works tax (12.8%).
Of the percentage jump that is reflected in the El Dorado Works tax, Williamson said, “How that is is beyond me. I don’t understand because it’s all coming off the same dollar spent.”
Council members credited city department heads and local residents for keeping expenditures mostly below budget and sales tax revenues steady, respectively.
“Even with the COVID thing, we’re still holding our own. I was just truly worried about how things were going to turn out. We ain’t like we were last year but we ain’t like we were when we were struggling a couple of years ago,” Council Member Willie McGhee said.
Added Williamson, “We’re in a lot better shape than what I thought we would be in. August was a really good month, probably back-to-school buying — stuff like that, I guess.”
Mayor Veronica Smith-Creer touted the leadership of city officials, with Council Member Paul Choate pointing to Williamson in particular.
Choate noted that it was Williamson who suggested in March that the city enact a spending moratorium on non-essential services in order to assess the potential economic impact of COVID-19.
“Vance Williamson stepped out and said, ‘Hey, folks, we don’t know what’s going to happen so let’s throw the brakes on some of this stuff,’” Choate said. “You look at the expense lines from just about every department and I think that’s helped.”
McGhee and Smith-Creer again expressed their appreciation for local residents, with McGhee saying, “I think at the beginning of this COVID thing, people were buying stuff in bulk, even though there was a shortage of some things. We really thank our citizens.”
Williamson told council members that a constituent recently shared with him and Council Member Judy Ward, both of whom represent Ward 2, information that appeared in a Barron’s Magazine article.
He said the article listed 2021 revenue projections by state and he said Arkansas “was way down the list” at 13 percent.
“That’s a good thing. El Dorado is kind of a strange microcosm, too, of Arkansas sometimes but from what I’m seeing here, I’m not going to be overly concerned about that right now,” he said. “We are going to have to go into (2021) budget talks and be very cautious, still, but we could be in a lot worse shape.”
Ward said El Dorado is faring better than many other cities in Arkansas and across the country. She said 2020 revenues for the Eureka Springs are reportedly down by 48%.
Choate pointed out that Eureka Springs is a destination city whose tourism economy has been crippled by the public health crisis.
Williamson inquired about revenues for local hotels and motels, asking, “They’re about 53%?”
“Something close to that. Some hotels are running at the 25% revenue level,” said Choate, who serves as chairman of the El Dorado Advertising and Promotion Commission.
The commission draws its income from a 3% lodging tax.
Council Member Andre Rucks expressed concern about revenues for September, saying that a back-to-school spending pattern gave revenues a boost in August.
July revenues were down in each city tax category.
“July wasn’t as good as August but we’re still doing great. I’m cautious of September. August is a conditioning month. Mothers are used to be spending money that month so I don’t know if they’re going to hold back for the next month or not,” Rucks said, adding, “So September is the one I’m really going to be watching closely.”
Williamson said 2021 city budget talks will likely begin in late October or early November.