Sherwood might ask voters for more money in November

By Greg Rayburn

Staff Writer

As a way to deal with upcoming budget problems, Sherwood city officials are considering asking voters in the upcoming November election to approve a tax increase.

On July 3, in the way many families sit around their kitchen tables going over their bills and incomes, city officials discussed potential ways to increase revenues.

Two ways of raising revenue were brought up during a city workshop held in the office of Mayor Virginia Hillman. They were imposing new franchise fees and asking city voters for atax increase. The potential taxing method city officials considered asking voters to adopt would be a property millage.

City Alderman Charles Harmon said some Sherwood voters may feel asking for a property tax would put a bad taste in their mouth because during the early 1990s city voters passed a city sales tax with the city’s pledge to make it take the place of a city property tax.

Harmon said asking city voters for a property tax may be viewed by some people as an attempt at breaking a promise to not impose property taxes.

Hillman said she believes if city officials came up with a plan on how they would spend new tax money the majority of voters would support such a measure.

“A lot of if is about building trust,” Hillman said.

Harmon said he believes the city is not taking advantage of collecting some types of franchise fees it has the legal right to charge various utility companies.

The city has a right to charge a utility franchise fee to Central Arkansas Water as well as cable operators for the cable work done in the Gap Creek area, he said.

City Engineer Ellen Norvell said some of Sherwood’s franchise fee agreements have not been changed in 50 years.

Both Hillman and Harmon said an important decision that has to be made is if the city will keep North Little Rock Electric as the Sherwood’s principal electric provider.

For about the last three years, North Little Rock has agreed to pay Sherwood about $500,000 annually for keeping North Little Rock as its electric provider. The payment of that amount came out of an agreement between North Little Rock Mayor Patrick Hays and Hillman for retaining the utility.

Hillman and Harmon said if Sherwood signs an agreement with Entergy or First Electric Coop the lump sum payment will stop coming from North Little Rock Electric.

North Little Rock Electric’s payment has helped the city budget during recent financially tight times, Harmon said.

“That is about the amount that is needed to pay (the loan on) for the golf course (The Greens at North Hills),” he said.

City Public Works Director Brian Galloway said the city partly subsidizes the general fund for providing garbage pickup service, and if rates were raised, it could make that service self-funded.

“In this year’s budget we have a $649,000 shortfall in garbage collection that comes from the general fund,” Galloway said. “If rates were raised $4.90 per month per household it would be balanced.”

Alderman Ken Keplinger said he agrees with the notion of asking city voters for more tax revenue, but he said some city residents are frustrated that Sherwood doesn’t take some of its money and set it aside for a rainy day.

He said if Sherwood asks voters for more money, then it needs to build a savings account for unanticipated expenses like it use to do years ago.

Harmon said the city once did have revenues set aside, but during the past several years officials have been taking them for various projects. Sherwood’s government and city has grown substantially in comparison to what was being spent in the early 1990s.

He said city residents have grown accustomed to receiving good quality services, and it has become increasingly difficult to set money aside to keep pace with expenses.

If city officials are going to ask voters for a tax increase in 2012, then they need to move forward with such a plan in August or September in time to meet deadlines to place an issue on the November ballot, Harmon said.