What do lower gas prices mean for the City of Arkadelphia’s budget? City Manager Jimmy Bolt said Wednesday that the fluctuating price of fuel has caused a “leveling effect” on the budget. The City Board budgeted $3.50 per gallon of fuel in 2008, never expecting to see record-high prices of more than $4 per gallon.

About $42,000 has been overspent on diesel in the sanitation department so far this year, but spending $2 per gallon of fuel now will help provide a cushion for next year’s fuel budget. “It’s always a positive aspect whenever you save money on what you thought you were going to spend,” Bolt said.

The board has created a new category in the motor vehicle budget for fuel alone and has budgeted $4.50 per gallon for 2009. “That will give us an opportunity to be in the good instead of being strict about not having enough money budgeted,” Bolt said. “Whenever you beat your budget it’s always a good sign for everyone.”

In the proposed 2009 budget, the board separated fuel from the motor vehicle supplies fund.

“Next year, we forecasted prices to go up, not to go down like they have. So there will be a little bit of a reserve” in next year’s fuel fund. Bolt said he does not think the city will need to allocate those funds elsewhere due to the economy.

If gas prices remain low, the surplus will sit in the fund to use when the city comes in over budget, he said. “We try not to (overspend), but there always seems to be that ebb and flow in the financing of the city as the year goes along. Some funds will be under budget, and some will be over budget.”

He said if there is a surplus from the fuel fund, it may help pay for improvements to the intersection of Sixth and Caddo streets, which has heavy tractor-trailer traffic. Improvements to the intersection would call for a four-way stop. The street will be widened so there will be a 50-foot radius at the intersection. The city’s cost to help fund the project is unknown, but Bolt said the city could afford it if the state will delete a zero from the $450,000 it is asking for the project.

“We just can’t do the project on that kind of money.”

Is spending $45,000 realistic for the city right now? “I don’t know,” Bolt said. “But that may be one of those offsets. We don’t budget 100 percent of our money, anyway.”

Most likely, he said, there will also be unexpected problems turn up that will require action.

Bolt talked about how, in his view, the downturn in the national economy has affected Arkadelphia so far.

He noted that the Great Depression did not affect smaller communities immediately after the stock market crashed in 1929. A couple of years later, however, the economic troubles finally trickled down and began affecting nearly everyone — including local governments.

“We still haven’t seen the drag of everything else falling down to match the price of gasoline,” he said. The price of petroleum products may see a lag in falling.

Bolt said he will “try to prepare for the worst where the city will be all right through rough times.” If there is enough money in the budget, and revenue streams are monitored as they come in, “then you can predict what you need to do six months out. You’ve just got to be prepared to react. It’s hard to correct (a budget) in a two- or three-month period.”

He said a city may react from one month’s revenue after looking at utilities. “We’ll try not to do that. We’ll try to look at two months’ revenue to see if there is a real trend or a sharp change in the revenue. That happens sometimes, and we can’t really explain it. You can’t make a big correction over just one month.”

Earlier this year, Bolt proposed three projects to the board: The revitalization of the Royal Theatre, a feasibility study on a biomass energy plant, and making the city’s solid waste more sustainable.

All three of these projects may still play an important role in the local economy, he said. “It becomes more apparent that we need these things. How do we handle our solid waste? It’s going to be even more critical that we handle this in a positive way.”

A feasibility study on the sustainability idea is important for his plan’s success. “What’s the most effective way of handling this? We need to know that. Without studying it, we don’t know.”

He said it is critical that the city begin cutting costs soon. “We’ve got to get better at our job. We’ve got to have a plan on how we’re going to manage our resources. The way we’ve done it the past 50 years or so, I don’t think that model is working.”

Revitalizing the Royal Theatre “can be a plus, too, even with the economy headed in the direction it’s headed.”

Another goal in bringing back the Royal Theatre — aside from providing entertainment — is revitalizing downtown to have other businesses spring up. “If you stand still — even in an economic downturn — you’re going to go downhill. If you try to improve yourself, you have a chance of staying ahead.”