LR BOARD: Meeting virtually.

The city of Little Rock is already feeling the financial impact of COVID-19, but city officials won’t have a clear picture of how far revenues from sales tax fell in April until the end of June, Mayor Frank Scott Jr. told the Little Rock Board of Directors Tuesday night. Sales tax represents the largest source of revenue for the city’s 2020 general fund budget, or 51 percent. The city won’t have the results of March sales tax revenues until the end of May. There is always a two month lag in state reporting of city sales tax.

“The magnitude of the COVID-19 impact on revenues will really vary dramatically depending on the success of the measure reopening plans underway and the avoidance of the resurgence of the virus,” Finance Director Sara Lenahan told the board. She said as the economic impact on the city becomes clearer, city officials will present an amendment to the board to further adjust the budget. On April 7, the board approved a $4.9 million reduction to the general fund.


Scott told the board “everything is on the table to ensure financial stewardship.” He said that included salary reductions for higher paid employees.

The city has seen a decline in charges for services, year-to-date as compared to last year, of $1.1 million, Lenahan reported. The zoo, losing out on lucrative spring break and nice weather crowds, is off $853,000 from the same period last year. The Parks and Recreation Department is down $62,000, largely because of the loss of pavilion rental charges. The River Market, through March, was down $28,000. Golf courses are down $87,000. The Jim Dailey Fitness and Aquatic Center is off $51,000. The city typically receives half of the salary cost of school resource officers; because schools have been closed, the city is off $44,000. City business licenses are due at the first of the year; at the onset of COVID-19 pandemic, the city stopped collecting late payments for those and that revenue is off $40,000. Because bars and restaurants have been closed, the city hasn’t received mixed drink supplemental tax revenue. Through the end of March, that leaves the city down $155,000.


The city has received several grants from the federal government:

*$787,000: from the U.S. Department of Justice’s Bureau of Justice Assistance program for coronavirus-related expenses involving public safety. Lenahan said the money could go toward overtime, personal protective equipment and supplies.


*$960,000 from the Department of Housing and Urban Development as part of the CARES Act. Of that, $879,000 is from HUD’s Community Development Block Grant program and $81,000 is from HUD’s Housing Opportunities for Persons with AIDS program.

Last week, Scott announced three initiatives that will be paid for through that HUD grant: a drive-through testing in Southwest Little Rock, a mask distribution program at Kroger and Edwards Food Giant locations and a $500,000 zero-interest loan program for small businesses.

Lenahan said that the federal stimulus package provide no direct financial relief to cities with a population below 500,000. She said Little Rock didn’t know if the state planned to share its $1.2 billion allotment with municipalities.

All of the city’s COVID-19-related expenses should be reimbursed by the DOJ or HUD grants, Lenahan said. Anything that’s not covered in that would likely be eligible for reimbursement by FEMA, though the city would have to provide a match.


The city has sufficient cash, investments and dedicated revenues to meet the debt service obligations on 2003 downtown parking bonds, Lenahan told the board. But because the city expects a reduction of net parking-related revenues of $405,000, it plans reduce its debt service coverage from twice the debt service amount to 1.55 times debt service. “That’s still quite a bit above the minimum requirement,” Lenahan said.

Meeting the debt service obligation on the city’s 2018 Art Center bonds, which are secured only by a 2 cent hotel tax, will require the board to approve a resolution, Lenahan said. The city can meet the $686,000 interest payment due June 1 with money from the hotel tax account, but to make the principal and interest payment of $1.2 million in Dec. 1, the city will have to use some proceeds of the tax that it had saved from before the bonds were issued in 2018. The board will have to vote to dedicate that revenue to the debt service on the bonds.

Scott told the board that code enforcement and yard-waste crews would begin regular operations in a “phased-in” approach beginning Monday.