The City of Crossett’s financial situation in the face of the COVID-19 economic fallout may not be as dire as first projected.
The Arkansas Municipal League had previously advised its member cities to expect a 30 percent decline in revenue for the first three months and a 20 percent decline for the following six months.
Because tax collection remittance to the city is delayed by two months, June was the first chance the city administration got to see how hard collections were hit by quarantine scale backs. The answer? Not nearly as bad as predicted in some areas.
Mayor Crystal Marshall told the city council Monday that when April’s fuel tax remittance – which funds 90 percent of the Crossett Street Department – was received, the decline was only marginal at 3 percent.
Marshall said she felt “cautiously optimistic” after seeing that number, but that the city would have a better understanding of what to expect once sales tax collections came in.
“Sales tax will be deposited on June 26; we will know more at that time,” she said. “We are starting to get to a point where we are starting to see some impact, if there is one, and we are monitoring that very closely.”
Marshall said the city administration had taken the initial projections from the municipal league, translated it into a dollar amount for Crossett, and worked to reduce costs where possible.
“(The municipal league) did the best they could, but I am happy that, if we have an error, it was on this side,” she said.
Sales tax collections will be a bigger indicator of what the city will see long-term, but Marshall said her optimism is in part buoyed by the fact that economic outflow from Crossett usually goes to Monroe, La., and since the number of COVID-19 cases there was so high that may have kept more dollars in the local area.
Marshall also told the council that the city’s managers have done a good job thus far of keeping track of the city’s COVID-19 response expenses and that the city is in a position to apply for Coronavirus Aid, Relief, and Economic Security (CARES) Act funds as soon as a mechanism to do so is in place.
Deputy City Clerk Lisa Gulledge said the city has approximately $50,000 worth of expenses for which CARES funds could be applied.
During the meeting the council also adopted a resolution endorsing sales and use tax breaks for Cynergy as it works to build a cargo trailer manufacturing facility in Crossett. The Ashley County Quorum Court had previously adopted an identical resolution.
Crossett Economic Development Director Mike Smith said the tax breaks are a statutory incentive that the state provides.
“Every company we have worked with that qualifies we have done this in the past,” Smith said.
“These are only done when there is a contract with the state for job manufacturing, which they have entered.”
The sales and use tax breaks will be applied to things the company is buying, such as, “18 welders from AirGas in Crossett; they are buying a sheer press, chop saws, table saws, grinders,” Smith said.
The contract for the break is audited.
“They pay their taxes as they go, in the end they will file a report and the state will come down and see that all the (equipment) is there,” Smith said.
Cynergy Cargo is based in Georgia, and has committed to bringing 70 jobs to Crossett.
In other news:
-Marshall said that, after talking to the state highway department, the city would not be removing the traffic lights on the highway at its intersection with Millyard Road. The council had previously voted to remove the lights.
The highway department told the city that removing the lights could put the city in a position that they would never allow traffic lights to go in that spot again, and that it could impact future grant funding for lights.
The lights had been set to flashing, which Marshall said was against federal guidelines. The highway department recommended the city bag the lights and have them turned off for now.
After hearing the report, Councilman Dale Martinie said removing the lights would be a mistake.
“We should never consider taking them down,” he said. “That’s too good an area for a new business to come in should (Georgia-Pacific) decide to sell it.”
-Martinie asked when the city can start work cleaning up the former Crossland Zoo property and repairing the city-owned parking lot on Third Avenue.
“If this is city-owned, we need to have a plan and we need to have it prioritized,” he said.
Public Works Director Jeff Harrison said the city’s priority projects at the moment are on Carolina Street and a collapsed alley at the intersection of Cedar Street and Waterwell Road.
“We found a hole in the road on Carolina that was the size of a dinner plate, but we looked at it and there’s a void under you could drive a small car in it.”
Harrison said that “as long as the weather holds” and no other serious projects arise, the city should be able to address the areas Martinie asked about by the end of July.
-The council adopted a resolution and the necessary paperwork required to reimburse City Attorney James Hamilton $4,000 for work he did on the city’s sales tax election in May.
The vote had to be taken because the work was outside the normal scope of the city attorney’s work as defined by ordinance.
It was adopted without objection.
-Martinie asked what could be done to get starting blocks installed at the City Pool so the Crossett Swim Team could host meets.
“We would be of two facilities that could actially hold a meet, which would bring people to Crossett,” he said. “But we have to have starting blocks.”
Though the council took no official action following the discussion of what would be needed, Martinie said he would gather bids for the project, telling the other members of the council he had already gathered information about the pool’s dimensions.
Even if the city can’t pay for the bids, the project might be paid for with a fund raiser, he said.